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== Fed Commentaries == | == Fed Commentaries == | ||
March 1, 2023: Minneapolis Federal Reserve Bank President Neel Kashkari said that he is open-minded to either 25 basis points or 50 basis points interest rate hikes in the next FOMC meeting. "To me, much more important than whether it’s 25 or 50 is what we signal in what’s called the dot plot." Kashkari added that the impact of rate hikes on the service sector has not been noticed. “We’re not yet seeing much of a sign of our interest-rate increases slowing down the services sector of the economy and that is concerning to me,” He said<ref>https://www.bloomberg.com/news/articles/2023-03-01/fed-s-kashkari-open-minded-on-quarter-or-half-point-march-hike</ref>. Kashkari is a voter at 2023 FOMC and one of its biggest hawks<ref><nowiki>https://edition.cnn.com/2023/01/30/economy/fed-fomc-2023-makeup/index.html#:~:text=This%20year%20the%20Federal%20Open,president%20of%20the%20Minneapolis%20Fed</nowiki>. </ref>. | |||
* March 1, 2023: Minneapolis Federal Reserve Bank President Neel Kashkari said that he is open-minded to either 25 basis points or 50 basis points interest rate hikes in the next FOMC meeting. "To me, much more important than whether it’s 25 or 50 is what we signal in what’s called the dot plot." Kashkari added that the impact of rate hikes on the service sector has not been noticed. “We’re not yet seeing much of a sign of our interest-rate increases slowing down the services sector of the economy and that is concerning to me,” He said<ref>https://www.bloomberg.com/news/articles/2023-03-01/fed-s-kashkari-open-minded-on-quarter-or-half-point-march-hike</ref>. Kashkari is a voter at 2023 FOMC and one of its biggest hawks<ref><nowiki>https://edition.cnn.com/2023/01/30/economy/fed-fomc-2023-makeup/index.html#:~:text=This%20year%20the%20Federal%20Open,president%20of%20the%20Minneapolis%20Fed</nowiki>. </ref>. | |||
* March 7,2023 Powell testimony with Congress: | |||
Additional notes: | |||
- FED tools can only affect the demand side of the economy. Policy tools to influence supply is not under the FED control. Congress debated that until now rates has not influenced inflation because the reason for high inflation is not in the FED control, and instead they are only hurting the economy. | |||
- Congress suggest to Powell that more modest budget spending is needed along with rate hikes, which is not happening yet. | |||
- The past 12 times unemployment has risen 1%, the economy has not been able to avoid a recession. The FED projections has unemployment going to 4.6% | |||
- If unemployment goes up 1%, is vey difficult to stop it there. 11 out of the 12 recessions, the unemployment rose at least another 1%. This time it would put unemployment close to 6% | |||
- Over the longer term, 4% wage increases are not sustainable due to lower productivity. | |||
==Meetings== | ==Meetings== | ||