The US central bank, the Federal Reserve, made its most recent rate hike in December raising rates another 50 basis pts (.5 of 1%) after four consecutive 75 basis pts hikes in 2022, pushing its ‘benchmark’ policy rate over 4%. Does the slower rate hike pace mean the Fed will soon stop raising rates (as many stock market investors believe)? Or will Fed chair Powell keep raising rates in 2023 as high as necessary to meet 2% inflation goal (i.e. will the ‘terminal’ interest rate rise much higher, beyond 5%). What are the implications of Fed rate hikes for US and global economy in 2023? Can the Fed attain its 2% inflation goal? How deeper will it drive the US recession in 2023? What’s the consequence for global currencies instability, global inflation and recession?
Listen to my December 15 Alternative Visions radio show for the in depth discussion of this important topic for recession and inflation in 2023, US and global. GO TO:
https://alternativevisions.podbean.com/e/alternative-visions-fed-turns-more-hawkish-warns-higher-rates-recession-coming/
SHOW ANNOUNCEMENT:
This past week’s Federal Reserve latest rate hike forewarns financial market investors in no uncertain terms the Fed is prepared to raise rates further, longer and higher in order to reduce inflation in 2023, even if it means more likely and deeper recession. Dr. Rasmus reviews the statements of Fed chair Powell and debunks the Fed’s forecast for inflation and (GDP) in 2023. Fed plans to raise base interest rates to 5.1% in 2023, reducing CPI prices to around 4% (vs. 7-8% so far) while slowing the real economy to only 0.5% and unemployment of 4.6%for 2023. Rasmus explains why 2023 will witness more than 5.1% rate hikes, a deeper recession than 0.5%, and more unemployment than 4.6%. Fed chair Powell’s latest press conference focus was twofold: 1. Telling investors get ready for rates to go higher and longer, 2) show Fed’s plan to attack wages & reduce spending on core services by generating more layoffs. Rasmus reviews follow on central bank rate hikes in Europe, Japan and explains how rising US dollar and geopolitical policies are responsible for Europe’s even greater inflation and deeper recession.
An excellent overview linking the ineffectiveness of monetary policy, the fading strength of consumer demand as an element of the US economy, and why the Fed can launch a vicious economic war against the US 90% and the rest of the world with impunity. It demonstrates how important it is to put the Fed under real democratic control. It is a measure of our corrupt intellectual culture that it doesn’t even acknowledge that Central Bankers at the End of Their Rope exists despite its clear diagnosis and prognosis of our current dilemma.
Hello, Jack. In your tweet, you mentioned that the US will not be successful in blocking China from accessing micro chips. How will China be able to circumvent the micro chip sanctions?