Summary
Federal Reserve Funds Rate raised by 0.75% to 1.6%
Federal Reserve will stop buying Treasuries, and begin looking to sell off balance sheet.
Meeting Notes
What are the potential base point raises for July 2022?
J. Powell left 50 and 75 basis points on the table, but for the first time, he wasn’t afraid to mention 100 points. “We are reacting to incoming data.”
Is a soft land possible?
It depends on what you consider a soft landing
J. Powell looks forward to a landing with 4.1% unemployment and inflation well on its way to 2%, and even he seems to recognize this will take much difficulty.
Are rates high enough?
In terms with the total inflation story from the 5.4% being experienced just last year in June, the Federal Reserve has just recently turned to more aggressive action which seems to please markets. Powell looks ready to address the issue.
How will you slow inflation?
“The committee is moving rates up expeditiously to more normal levels, and we came to the view that we’d like to do a little more front-end loading on that”
This direct quote from the chairmen suggest that more aggressive demand suppression is coming, suggesting further aggressive action to slow inflation growth.
Is the Federal Reserve trying to create a recession?
The Chairmen was very clear that the committee was not trying to force a recession. He reiterated the Federal Reserve Mandate of 2% inflation and maximum employment.
Opinion
The Federal Reserve Chairman and his committee members are doing all they can, within the powers set with them, to reduce the likelihood of a recession and lower inflation to respectable levels. Even recognizing this, there is likely no way to avoid a recession from here on out as well as double-digit inflation. I believe that this year the recession will begin, and that came well before the Atlanta Federal Reserve Bank recanted their position of 0.9% GDP growth to 0% just days before the second quarter comes to an end, solidifying my position.