What the most stylish Federal Reserve hobby rate hike formula for the U.S. economic system


The Federal Reserve is expected to raise interest rates for the eighth time over the past year to combat stubbornly High inflation today's anticipated hike is expected to be the smallest since the Central Bank began pushing rates up almost a year ago experts believe the Federal Reserve will increase rates by one quarter of a percentage point today.

This move would bring the target rate to its highest levels in 15 years joining us now is Javier David he is a managing editor of business and markets for axios he's also a CBS News contributor Javier welcome thanks so much for being here so you know as with all sort of fed announcements just sort of set the table for us is this about what the FED.

Actually does or what they say surrounding what they do you know the funny thing about being a Fed Watcher is what they're going to do is usually Telegraph pretty well in advance all of the heat and light takes place when they issue the statement because people get paid a good deal amount of money to parse that language um and also when the.

Sort of fed chairman Jerry Powell takes to the podium and he'll start elaborating and on that point we do have confirmation that the FED has decided to increase interest rates by by uh 0.25 uh a quarter a quarter percent a quarter percent um tell us Javier since this is a smaller margin than we've seen in the.

Other interest rate hikes how is this going to affect American consumers either who are taking out loans who are carrying credit card debt what are we going to say now yeah so well a quarter point is better than a half percentage Point um the fed's language and its statement says that they expect ongoing increases.

So brace yourselves for higher mortgage rates higher credit cards um and uh if you're carrying balances I'd suggest you pay them off as much as you can because uh those interest rates are going to continue to creep up and consumers are taking out record levels of uh credit card debt and this is going to cost yeah so so we know that the.

Previous sort of measures that the FED took were really we were told a way to kind of put the brakes on inflation not to stop it because that obviously is a huge issue a lot of factors going into that but it was supposed to sort of slow the rate of inflation how do you see this move today well that that in fact the irony as it has been happening that.

Way the fence ideal scenario was first and foremost to kind of whip inflation now if you remember that old yeah um and they have because in fact uh it appears at least for the moment that inflation peaked middle the middle of 2022. so it worked right so on one hand it worked there are two things that the FED is after it wants to slow inflation.

And it wants the job market to sort of uh tame itself um there's only one of those particular uh fronts is happening because we have a jobs Market uh jobless claims is teetering near a 50-year low um the data that we got today on uh turnover on jobless what we call the joltz data which is just basically a.

Gauge of how many jobs are open and how many people are leav ing jobs voluntarily that data hit another unexpected high so people are the jobs are still available about two per every one person looking for one so um we are now given that we have uh we've gotten the confirmation it's a quarter of a percentage Point.

Um and that's also the smallest of the rate hikes that we've seen right does that indicate to you that this that the economy is in fact starting to do what the FED wants it to do it's healing itself the numbers aren't exactly where the FED wants it to be yet they're telegraphing that more hikes could be on the way but you know this is less than.

This is less aggressive than we've seen certainly well we're getting there and um so there's a lot of data that suggests that the consumers starting to get tired they're not spending as much inflation certainly the the it has moderated but it has not been tamed um and Corporate America is kind of positioning itself for a recession and.

The irony there is a number of the earnings that we've gotten over the last several weeks have been stronger than expected but again the forward-looking guidance from Corporate America is we think this year is going to be pretty tough and we're going to pull back and act accordingly yeah what about that because you know we were talking to.

Someone earlier about the fact that last year at the end of last year in particular we kept hearing the r word recession right so what does this mean and if you're a corporate America um it was it would seem that there was such volatility right not that long ago but now um what is the signal being sent here.

How do you think that's actually going to be received is this a good move on a part of the fact well the r word is still very much in play and uh you're seeing it a lot or hearing it a lot from uh CEOs but the there's another word whenever they use the r word which is mild so the the understanding is we're going to get the soft Landing scenario.

We're definitely I mean barring something really dramatic we're not going to get a huge spike in unemployment and that's what would really send the signal that uh this economy is in trouble that would imply that the FED would either stop it's um interest rate hikes or it would even put it in reverse and maybe ease and.

We're not seeing any indication that's going to happen anytime so let's step just a little bit part of the reason why the FED is increasing these interest rates is to try and get consumers to spend less to ease the inflation but we're not seeing consumers doing that they continue to spend given the possibility that a recession even if.

It's going to be a soft Landing is on the horizon what's your advice to viewers I would say stop spending credit card debt because that's the key that's how everyone is moderated or tried to moderate an inflationary cycle the likes of which we haven't seen in decades um it's tough uh and people are spending but they're earning more so it's not a.

Big deal because people are continuing to have jobs they're continuing to get paid raises at their jobs uh but the problem that we have now is that credit card which fell off really substantially in the wake of covid has come up with a Vengeance and the fact that a number of people are carrying balances month to month is going to cause some significant.

Amount and that's an indication um I think one signals of policy makers that consumers demand Still Remains probably arguably unheally strong all right Javier David so glad to have you here on set and have you analyzed this breaking news for us thanks thank you

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3 thoughts on “What the most stylish Federal Reserve hobby rate hike formula for the U.S. economic system

  1. Yep.. $150k and sole provider and after automobile funds, dwelling funds 6 other folks to feed i in actuality feel we’re paycheck to paycheck.. and each month an unexpected expense occurs, new fridge!, new washer, celebration, tickets etc.. constantly something.. and no longer something in $100-200.. no longer no longer up to $1,000 a month in unexpected things that must be paid or purchased.. the entirety lawful too dear

  2. After a nightmarish 2022, shell-alarmed investors dangle losses to recoup and loads to ponder, as an inflation file and a raft of varied facts did shrimp to alternate expectations that the Federal Reserve would likely continue hiking intrest charges although the financial system slows down, Which methodology extra pink ink for portfolios for the first quarter of yr 2023. How can I revenue from the fresh unstable market, I'm silent at a crossroads deciding if to liquidate my $250k bond/stocck portfolio

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