Frequently Saturday morning is met with several long time acquaintances as our paths cross in timely fashion at the local Starbucks.
After a few pleasantries, the normal economic and market update question was presented. Maybe it was the extra restful sleep, maybe it was just starting the weekend out bright with a new thought, either way this possible Epiphany was worth sharing.
FOMC Talks Rates Up
What if the federal reserve, FOMC led by chair Jerome Powell were able to aggressively talk interest rates up, which they have done, but not actually have to raise rates near to the level of their chatter?
Currently using our Old Faithful CME Fed Watch interest rate tracker tool….8-10 Yes (8-10 WOW) normal rates priced into markets by July 2022…
So why would the federal reserve want extra room to not have to raise rates? If the economy naturally slows or goes into a recession and the Federal Reserve has raised rates very little it could be easily construed that they could say it wasn’t their fault!
Longshot, maybe, but if we were sitting in their perch that would be a nice safety net to have!
We listen and constantly research different thoughts by different folks and have not heard this in any venue!
So you heard it here first, thanks Starbuck buddies, for the new possibility!
Have a Great “Federal Reserve has an Out” day!
John A. Kvale CFA, CFP
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth