Fed Rate Hikes Approaching The 'Breaking Point'

Oct. 18, 2022 5:44 PM ETTBT, TLT, TMV, IEF, SHY, TBF, EDV, TMF, PST, TTT, ZROZ, VGLT, TLH, IEI, BIL, TYO, UBT, UST, PLW, VGSH, SHV, VGIT, GOVT, SCHO, TBX, SCHR, GSY, TYD, EGF, VUSTX, FIBR, GBIL, UDN, USDU, UUP, RINF, AGZ, SPTS, FTSD, LMBS35 Comments

Summary

  • While Fed rate hikes remain Powell’s preferred tool to combat inflation, the reality is that inflation will drop markedly over the next several months.
  • With households already struggling to make ends meet, the impact of Fed rate hikes on consumption, the main driver of economic growth, will occur quickly.
  • When the lag effect of monetary policy collides with accelerating economic weakness, the Fed will realize its mistake.

Interest.

artisteer/iStock via Getty Images

Last week, the FOMC published its minutes from the September meeting, confirming its recent stance that Fed rate hikes will continue until inflation is vanquished. To wit:

“Many participants noted that with inflation well above

Fed Rate, Fed Rate Hikes Approaching The “Breaking Point”

Fed Rate, Fed Rate Hikes Approaching The “Breaking Point”

Fed Rate, Fed Rate Hikes Approaching The “Breaking Point”

Fed Rate, Fed Rate Hikes Approaching The “Breaking Point”

Fed Rate, Fed Rate Hikes Approaching The “Breaking Point”

Fed Rate, Fed Rate Hikes Approaching The “Breaking Point”

Fed Rate, Fed Rate Hikes Approaching The “Breaking Point”

Bank of America

Fed Rate, Fed Rate Hikes Approaching The “Breaking Point”

This article was written by

Lance Roberts profile picture
29.71K Followers
Unique, unbiased and contrarian real investment advice

After having been in the investing world for more than 25 years from private banking and investment management to private and venture capital; I have pretty much "been there and done that" at one point or another. I am currently a partner at RIA Advisors in Houston, Texas.

The majority of my time is spent analyzing, researching and writing commentary about investing, investor psychology and macro-views of the markets and the economy. My thoughts are not generally mainstream and are often contrarian in nature but I try an use a common sense approach, clear explanations and my “real world” experience in the process.

I am a managing partner of RIA Pro, a weekly subscriber based-newsletter that is distributed to individual and professional investors nationwide. The newsletter covers economic, political and market topics as they relate to your money and life.

I also write a daily blog which is read by thousands nationwide from individuals to professionals at www.realinvestmentadvice.com.

Recommended For You

Comments (35)

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.