FOMC 2024 0612

The Fed funds target rate remains 5.25%%-5.50%.

FOMC 20240612

BLS reported 2024 May CPI 3.3% higher than May 2023, a mite below Wall Street expectations, leading to another inflationary impulse entering the system. Unless reversed, to be evident in future consumer prices. The value of the Federal Reserve Note fell sharply. This was evident across foreign currencies, Treasury prices, stock prices, and commodity prices … copper, gold, oil, gas … all of these things suddenly became more valuable today or dollars became less valuable. The question of which is left as an exercise for the reader.

3 thoughts on “FOMC 2024 0612

  1. Finster says:

    Financial media have been pathologically seized since the CPI release with speculation on the likely course of the Fed’s target rate over the course of the coming months. Almost unnoticed by comparison. the bond market actually cut rates across the maturity spectrum.

    You might come away with the impression that for today’s media, speculation is massively more important than fact. There was no speculation however on the implications of the plunge in the dollar’s purchasing power in real time global markets on the likely course of consumer prices.

  2. Finster says:

    PPI came in this morning at 2.2% over last year, again softer than Wall Street expectations. The bond market trimmed rates further in response, cutting by several more basis points on top of yesterday’s cuts of four to eight basis points on one to ten years maturity.

    Other asset prices reversed yesterday’s gains, with the dollar regaining most of yesterday’s losses. Should this pattern continue the Fed will follow with cuts of its own. Whether it realizes it now or not … armchair speculation about September or December or whenever couldn’t be less relevant. Markets move, the Fed follows.

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