Timing the Fed's Rate Hike

Barb,

The assumptions embedded in this situation are that the Fed is aware and in control.  They are telling us that inflation will subside.  But, they don't have a lever to set inflation.  The lever that they can push and pull sets interest rates.  The Fed's expressed belief that inflation is destined to subside regardless of their decisions on interest rates is the bet that they seem to want to take even with increasing fiscal stimulus and so many employers looking for workers, the market is riding along as it appears focused on what the Fed will do rather than what the Fed needs to do at this point.

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Neil Stanley
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Original Message:
Sent: 11-10-2021 10:27
From: Barb Rehm
Subject: Timing the Fed's Rate Hike

When will the Fed start raising interest rates? You can compare your internal forecasts with the experts' in this week's complimentary story from S&P Global Market Intelligence. Of course, no one really knows (not even Fed officials), but the consensus guess now is the first hike will come in June 2022. By then the folks paid to do this sort of prognosticating figure unemployment will have eased and inflation intensified enough to warrant a rate increase. But we all know a lot can happen between now and then. Still, the story is a great read with lots of interesting data.

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Barb Rehm
Senior Managing Director
IntraFi Network
Arlington VA
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