Breaking: Admitting QE has boosted inflation expectations more than expected, Minneapolis Fed...


Breaking: Admitting QE has boosted inflation expectations more than expected, Minneapolis Fed President Kocherlakota says the Fed Funds rate may need to rise 75 basis points in 2011. The dollar gains sharply against the major currencies.

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Comments (7)
  • Jason Tillberg
    , contributor
    Comments (1326) | Send Message
     
    You think???

     

    Negative real rates of return with this parasitic Zero Interest Rate policy is my biggest grip.
    31 Mar 2011, 04:21 PM Reply Like
  • bbro
    , contributor
    Comments (11217) | Send Message
     
    There is a.50 funds rate priced in December...
    31 Mar 2011, 04:28 PM Reply Like
  • SA Editor Stephen Alpher
    , contributor
    Comments (562) | Send Message
     
    Dec FF are trading at 99.67, implying a FF rate of .33%, 18 basis points higher than today. So 75 basis points in hikes would be significantly higher than what the market currently expects.

     

    I would assume Bernanke or Yellen will trot out one of the Fed doves (perhaps themselves) to refute the Kocherlakota comments within a day or two.
    31 Mar 2011, 04:36 PM Reply Like
  • Duude
    , contributor
    Comments (3413) | Send Message
     
    Or Kocherlakota will suddenly announce his retirement leaving more seats for Obama to fill.
    31 Mar 2011, 04:59 PM Reply Like
  • warrenrial
    , contributor
    Comments (550) | Send Message
     
    Obama will only fill seats with those who he knows will help him destroy this country.
    31 Mar 2011, 05:19 PM Reply Like
  • Hendershott
    , contributor
    Comments (1752) | Send Message
     
    What's boosting inflation expectations is a collapsing Middle East and skyrocketing wages in China. We don't exactly have a booming economy driving demand for goods and services.
    31 Mar 2011, 08:29 PM Reply Like
  • Econdoc
    , contributor
    Comments (2938) | Send Message
     
    Increasing the FF rate will not do anything to impact commodity inflation and with 9% unemployment, absent wage inflation and plenty of capacity it will cause a deflationary spiral and destruction of productive capacity - not a good thing

     

    If you want to do something about rising food prices - eliminate freaking corn ethanol subsidies - that ridiculous policy has way more impact than the Fed Funds especially while money aggregates are under control.

     

    E
    31 Mar 2011, 11:04 PM Reply Like
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