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FED FUNDS Rate Inflation Adjusted Remains TightFED FUNDS Rate Inflation Adjusted for core inflation remains in the tightening area. As inflation rises over the next few months, thanks to Trump's liberating all Americans with higher taxes and less discretionary income to spend. I expect this chart to drop as inflation rises and Fed holds rates steady. Alternatively, FED lowers rates bc we will be in a recession, and it is trying to make private money creation cheaper to pump the economy. Which of the two will occur first, I could not tell you. However, it is important to keep a close eye on this chart in the months ahead. Click like, follow, subscribe.
FRED:FEDFUNDSShort
by RealMacro
3
Will Jerome Powell give in on Wednesday May 7 by cutting rates?Introduction: As the US Federal Reserve (FED) approaches a new monetary policy decision, the central question is: Will Jerome Powell bow to political pressure and initiate a rate cut on May 7? To answer this question, it is essential to look back at the institutional framework of the FED and the historical precedents that shed light on the current stakes. Created by the Federal Reserve Act of 1913, the FED is founded on a fundamental principle: its independence from the executive branch. This principle ensures that its monetary decisions, particularly with regard to interest rates, are not dictated by political considerations, but by macro-economic factors. 1) The independence of the FED is enshrined in law The independence of the FED is enshrined in law. Its Chairman, appointed for a four-year term, can only be removed by the President of the United States for "just cause", in other words, gross misconduct, a provision designed to prevent any attempt at direct political interference. This institutional bulwark was put to the test in the 1970s, when a landmark episode pitted Richard Nixon against Arthur Burns, then Chairman of the FED. In a bid to stimulate the economy before the 1972 presidential election, Nixon put intense pressure on Burns to lower interest rates, despite inflationary signals. Burns eventually relented. While this accommodating monetary policy initially bore electoral fruit, it also triggered a long period of inflation and a severe economic crisis. Today, this episode remains a historic lesson in the consequences of an FED subject to political will. 2) On the macroeconomic front, Powell should wait beyond May 7 In 2025, the FED finds itself under pressure again, this time from Donald Trump, but current economic conditions do not justify hasty action. Although inflation is slowing, with the PCE index close to the 2% target in nominal terms, several factors argue in favor of the status quo. Firstly, US household inflation expectations, as measured by the University of Michigan index, remain high. Secondly, U.S. companies face uncertainty about how to deal with the tariffs: should they pass on costs to consumers or cut their margins? Finally, despite existing economic room for manoeuvre, macroeconomic signals are not clear enough to justify an immediate rate cut. Conclusion: History shows that giving in to political pressure can be costly for the US economy. Jerome Powell seems aware of this responsibility and should adopt a measured wait-and-see strategy. May 7 will probably not be the day of the long-awaited monetary turnaround, but more likely the monetary policy decisions of June or July if disinflation is confirmed and a trade agreement is reached between the USA, China and the EU. DISCLAIMER: This content is intended for individuals who are familiar with financial markets and instruments and is for information purposes only. The presented idea (including market commentary, market data and observations) is not a work product of any research department of Swissquote or its affiliates. This material is intended to highlight market action and does not constitute investment, legal or tax advice. If you are a retail investor or lack experience in trading complex financial products, it is advisable to seek professional advice from licensed advisor before making any financial decisions. 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FRED:FEDFUNDS
by Swissquote
Fed Funds Before CPICPI will be an important event tomorrow an hour before open. I believe the most important thing will be the reaction of the fed fund futures. Currently the target rate is sitting at 4.64 and the market is pricing in an 86% chance of that rate moving down to between 4.25-4.50. As long as this expectation remains, I think we'll have a bullish to flat end to the week. Downside would come if rate cut expectations changed due to an unexpected report. That would be a major shift right before the fed meeting so that seems unlikely, but it will be important to watch.
FRED:FEDFUNDS
by AdvancedPlays
SPX direction after first and last FED rate cutsThis chart compares FED rate cuts to SPX chart. The last 3 times after the first rate cuts there was a slight upward rally of the SP500 of about 5-10%, before going on a bearish retrace of about -40%, -50% & -20%, and then bottoming out only AFTER the final rate cut. Based on this, if history repeats, there might be a year end upward movement in the stock market, perhaps followed by a retrace through 2025 until the final rate cut. And then massively up from there again. The last 3 times rate cuts did not mean sp500 starts going up immediately. There was a retrace instead. SP500 went up only AFTER the final rate cut.
FRED:FEDFUNDSShort
by strip
Inflation, 2yr-bond yield, fund rate, unemployment, recessions The chart illustrates how five key economic indicators—Inflation, 2-Year Bond Yield, Federal Funds Rate, Unemployment Rate, and Recessions—compare across different time periods or economic conditions. 1. Inflation: This line or bar typically shows the rate at which prices for goods and services rise, leading to a decrease in purchasing power. Inflation is crucial for understanding cost-of-living adjustments and purchasing power. The chart might indicate periods of high or low inflation and how it correlates with other indicators. 2. 2-Year Bond Yield: This line represents the interest rate on 2-year government bonds, which reflects investor expectations for short-term economic conditions and interest rates. A higher yield often suggests expectations of rising interest rates or inflation, while a lower yield might indicate expectations of economic stagnation or lower rates. 3. Federal Funds Rate: This rate, set by the Federal Reserve, influences overall economic activity by affecting borrowing costs. Changes in the Federal Funds Rate can signal the Fed’s stance on monetary policy, with increases often aiming to combat inflation and decreases aiming to stimulate growth. 4. Unemployment Rate: This line measures the percentage of the labor force that is jobless and actively seeking employment. It provides insights into labor market conditions and economic health. High unemployment typically indicates economic distress, while low unemployment suggests a robust job market. 5. Recessions: Recessions are usually marked as shaded regions or periods on the chart. They indicate times when economic activity is declining, often accompanied by rising unemployment and decreasing inflation. The chart might show how other indicators like inflation and bond yields behave during recessions. Comparative Insights: Correlation: By comparing these indicators, the chart helps identify patterns, such as how rising inflation might correlate with higher bond yields and Federal Funds Rates. Economic Cycles: It shows how these indicators respond to economic cycles, including periods of expansion and recession. For example, during recessions, inflation might decrease, bond yields might fall, and unemployment might rise. Policy Impacts: The chart may also highlight the impact of monetary policy changes (reflected in the Federal Funds Rate) on inflation and unemployment.
FRED:FEDFUNDS
by creengrack
Alertes de la courbe des rendements : correction de marché soon?Observations récentes sur le marché obligataire : Les dernières évolutions sur le marché obligataire ont soulevé des questions parmi les investisseurs. L'inversion de la courbe des rendements, souvent considérée comme un indicateur de récession, est de plus en plus observée. Cette situation, associée à une hausse du taux de chômage et à une volatilité accrue du marché, soulève des interrogations quant à la possibilité d'une correction significative du marché. Inversion de la courbe des rendements : Actuellement, la courbe des rendements est inversée, avec des rendements à court terme (comme les bons du Trésor à 1&3 ans) qui dépassent les rendements à long terme (comme les bons du Trésor à 10 ans). Cette inversion indique une anticipation de croissance économique affaiblie, un phénomène qui a souvent précédé des récessions dans le passé. Une courbe des rendements inversée a historiquement annoncé des récessions avec un délai de 6 à 18 mois, période qui a souvent été marquée par d'importantes corrections sur le marché boursier. Taux de chômage en relation avec la courbe des rendements : Le taux de chômage est un indicateur qui réagit avec retard. Son augmentation, en conjonction avec une courbe des rendements inversée, pourrait indiquer le début d'une récession. Les données récentes montrent une augmentation du chômage, qui, associée à l'inversion de la courbe des rendements, suggère que le ralentissement économique pourrait être proche. Historiquement, une inversion de la courbe des rendements associée à une hausse du chômage a souvent conduit à une baisse de la consommation des ménages et des bénéfices des entreprises, impactant négativement les marchés d'actions. Indice VIX (Indice de Volatilité) : L'indice VIX, souvent considéré comme un baromètre de l'anxiété des investisseurs, reste à des niveaux élevés. Une hausse de cet indice, en même temps que l'inversion de la courbe des rendements et la hausse du chômage, suggère que les acteurs du marché pourraient s'attendre à une augmentation de la volatilité et à des risques baissiers. Stratégie de trading : Dans ce contexte, il pourrait être judicieux de réévaluer l'exposition aux actifs à haut risque. Orienter une partie du portefeuille vers des actifs jugés plus sûrs, comme les obligations ou l'or, pourrait contribuer à réduire les pertes potentielles. Conclusion : L'association d'une courbe des rendements inversée, d'une augmentation du taux de chômage, et d'un indice VIX élevé suscite des interrogations pour les marchés. Bien qu'aucun indicateur ne soit parfait, leur alignement mérite une attention particulière. Il est conseillé de se préparer à une éventuelle volatilité et d'envisager des stratégies défensives pour sécuriser votre portefeuille. Votre avis sur la situation actuelle du marché serait apprécié. Surveillez-vous d'autres indicateurs ? Partagez vos perspectives et stratégies pour aborder cet environnement incertain.
FRED:FEDFUNDSShort
by VincentSmits
FED hawkish with encouraging inflation data. ...are we at a pantomime of a creaking economic system? bond futures are currently pricing in a cut of just over 25 basis points in fed funds between now and the end of the year. While the Fed bides time on a possible interest rate cut, inflation data is encouraging. Core goods (excluding food and energy), the category that drove the inflation spike in 2021 and 2022, registered its biggest deflation since 20 years. Next cut in September? Let me know your opinion with a comment. Thank you
FRED:FEDFUNDSShort
by NewHOrizons1
Fed Balance Sheet Up, Fed Funds Down, Powell to be Replacedcorrelations drawn using ancient chinese calendar methods takeaway predictions: federal reserve balance sheet to increase, fed funds rate to decrease, and fed chair powell to be replaced, all starting before the end of feb 2025 supporting data and patterns: every fed reserve chair has started AND ended their term in either an ally year, a secret friend year (powell), or within 2 weeks of a ally year (yellen) federal reserve balance sheet has gone up during all ally years since the record began in 2003 (orange line) the fed funds rate (gray line) is always highly volatile during a chairman's oppositional year federal reserve balance sheet remains neutral to down in oppositional years there is not a direct correlation between a falling funds rate and the calendar method, but there is a strong correlation between an increasing balance sheet and a lowering of the fed funds rate. though the correlation between the falling funds rate and the calendar method is secondary, it still may be useful
FRED:FEDFUNDS
by GoodTexture
Interest Rate Cuts 3 Times This Year May Not Happen - Here's WhyMany interpreted from the latest FOMC meeting that the Fed is going to have three rate cuts this year, but Jerome Powell did not say that. Let me quote directly from his transcript: “If the economy evolves as projected, the median participant projects that the appropriate level of the federal funds rate will be 4.6 percent at the end of this year” And he added: “These projections are not a committee decision or plan” In today’s tutorial we will discover why so many of us got it wrong in what he is trying to tell us. And who are these participants? 10-Year Yield Futures Ticker: 10Y Minimum fluctuation: 0.001 Index points (1/10th basis point per annum) = $1.00 Disclaimer: • What presented here is not a recommendation, please consult your licensed broker. • Our mission is to create lateral thinking skills for every investor and trader, knowing when to take a calculated risk with market uncertainty and a bolder risk when opportunity arises. CME Real-time Market Data help identify trading set-ups in real-time and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
FRED:FEDFUNDSLong
by konhow
2