FOMC 2025 0319

Posted on by Finster Posted in Federal Reserve

The Fed Announces

The Federal Open Market Committee announcement:

FOMC 20250319

As usual, the meaningful action is in the bond market, which is a far more reliable indicator of interest rates. There, the trend has been generally lower since around January 10. As of March 17, the one year rate was 4.11% and the ten year 4.31%, a bit higher since the beginning of the month.

24 thoughts on “FOMC 2025 0319”

  1. Reply
    Finster says:

    The Fed left its fed funds target the same but reduced the rate of its balance sheet runoff. A closet monetary easing … while even the dumbed-down government inflation statistics remain above the Fed’s dumbed up target.

    The good news … stock price inflation is about zero over the past six months; -0.19%. Copper and gold prices are both showing continued high inflation, with copper up 17.44% and gold up 17.26% over the same period. All of these represent inputs into wage and price inflation after smoothing and lagging, much like a moving average. If on average they were to be around the same levels in another six months we could expect wage and price inflation to begin to converge to zero. But that’s a pretty big if.

  3. Reply
    Finster says:

    Powell reportedly jumped on the blame-Trump-for-inflation bandwagon, alleging that the tariffs are already staring to push it higher. At least this is what Bloomberg reported; I didn’t hear it myself since it was lunchtime and the forked tongue entree was spoiling my appetite.

    Of course Powell would want to shift the blame. He doesn’t want to admit he erred in cutting rates last year. He led the multi-trillion-dollar monetary bonanza just a few years ago, and doesn’t want to clean up the mess. With an establishment media that loves easy money and globalism anxious to help pass the inflation buck, he won’t have to face many tough questions. According to them, Powell’s printing press wasn’t worth mentioning in connection with soaring consumer prices; it was Putin.

    It takes a year or so for inflation to start working its way from the financial world to wages and prices. Powell’s 2020 inflationary lollapalooza kited stock, bond, and commodity prices immediately (see any stock market or gold chart from 2020), but didn’t do the same to wages and goods prices for another year or so. The prematurely-aborted monetary tightening of 2022 similarly depressed asset prices immediately but likewise had most of their disinflationary effect on goods and services prices in 2023. The inflation being seen in consumer prices in 2025 was registered in asset prices in 2024.

    The latest CPI report covered February 2025. Trump was inaugurated only a few days before that.

    Bottom line: The establishment is gearing up for more inflation and setting the public up to blame Trump for it.

    1. Reply
      Finster says:

      Kitco had a quote from Powell’s post meeting press conference: “But we will be working, and so will other forecasters, to try to find the best possible way to separate nontariff inflation from tariff inflation.”

      Is it just me? Or does anybody else really think there even are such things as “nontariff inflation” and “tariff inflation”?

      Inflation is always and everywhere a monetary phenomenon, said Milton Friedman. If it’s not monetary, it’s not inflation.

      Besides, there’s no way inflation could selectively affect only one subset of prices. How it could cause goods and services prices to rise but not asset prices goes unexplained.

      Powell either thinks he can just make up economics to suit or that people are irredeemably economically ignorant. Or maybe journalism has ceased to exist in Wall Street media. You know, the kind that used to challenge political leaders’ claims?

      And my use of the term “political” here is no accident. It’s plainly not economics.

      What Powell apparently means here is not inflation, but rising consumer prices. Lots of things might cause that. It might be taxes, it might be natural disasters, it might be war, it might be inflation. But the Fed is responsible for only one of those. When it figures out which one, it might have a snowball’s chance of running proper monetary policy.

      1. Reply
        Finster says:

        As a corollary, lots of things might cause falling consumer prices, most conspicuously, technological advance. But that’s’ not deflation, it’s progress. It sure isn’t the Fed’s job to counteract it.

  5. Reply
    mega says:

    Megas dispatch from England:- Runaway debt

    Treasury to borrow £63bn more than forecasts before Labour came to power
    The Treasury is on track to miss official forecasts for public borrowing by £63bn compared to projections made before Labour came to power, a think tank has warned, as Rachel Reeves prepares to announce spending cuts next week.

    The Office for National Statistics (ONS) said today that public sector net borrowing, excluding banks, in the 11 months to February overshot projections by the Office for Budget Responsibility (OBR) by more than £20.4bn.

    The Treasury has borrowed £132.2bn so far this financial year, the ONS said, compared to OBR estimates alongside the October Budget that it would be £111.8bn.

    The Institute for Fiscal Studies (IFS) said this would likely mean that over the whole financial year Treasury borrowing could come in at £151bn, which would be £23bn more than the OBR’s October forecast.

    However, it said the figures mean that public sector borrowing could come in £63bn higher than the OBR’s forecasts a year ago, before Labour won last year’s general election.

    IFS economist Isabel Stockton said: “Today’s data on government spending, borrowing and revenues underscore the challenges facing the Chancellor as we head into the week of the Spring Statement.

    “The forecast will include costings for cuts and a tightening of eligibility for health-related benefits announced this week, although as we have seen from previous reforms the eventual impact will depend on the way individuals respond to the changes.

    “There are risks here. But having boxed herself in with promises to meet her fiscal targets, not to raise taxes further and not to return to austerity for public services, easy or risk-free options for the Chancellor are in short supply.”

  6. Reply
    mega says:

    Meantime Madness @ Heathrow airport.
    It seem a major power substation BLEW last night BIG TIME. 16,000 homes without power….worse still it was feeding Heathrow airport, London major airport & UK biggest. They turn around 200 K passengers a day & its shut for at lest 24 hours..

    It seems it did have back diesel generators, but they were replaced with “Green” Bio mass ones that will take “some time” to get up to stream……..unlike the old Diesel ones that kicked in with seconds………

  7. Reply
    mega says:

    Oh Dear!
    The British are some what unhappy to find their “European partners” have melted away. They are NOT going to pony up “Boots on the ground” in Ukraine. Starmer the British PM has been Humiliated…..BIG time.

    There are rumours that wispers have begun, i think its more likely after the local elections in May. The Labour party has to cut back BIG time, lots & lots of FREE stuff is going thus they might go for Starmer to cut it all………….then they cut him.

    Mike

    1. Reply
      Finster says:

      You can hardly read the business news these days without running across stories trashing Tesla. Has something basic really changed about the company, or are the media elite just having conniptions over Musk’s politics?

      Sure, the stock is massively overvalued, but that’s hardly new, and other massively overvalued companies with more politically correct leadership don’t seem to be having the same problems.

      https://dailyreckoning.com/the-target-on-teslas-back/

      Just as with the Fed, the business media are so dominated by the establishment elite they are no longer capable of honest reporting. They want easy money, big government, and won’t let anything like integrity or principles get in the way.

    1. Reply
      mega says:

      I think there are a number of factors to TESLA attacks.
      1st is Trump & his relationship Elon……..suddenly all those tree hugging Hard Left Lib DNC types found “Electric Jesus” was French kissing the devil.

      From Day one Tesla was a Deep state project.
      Many say it was a “Green Grift” i say more like CIA motors, giving a hold new meaning to the term “Company car”. His total “Get out of jail card” for his “Self driving” tec that has killed quite a few……such bold claims from ANY other car producer would have them in court faster than M3P.

      So, there is blow back….but may be Elon just has great timing.
      The “Model” range is basically one car…..which was engineered with a lot of help from Toyota.
      A Guppy or a fat Guppy……..now fast becoming an old car. He just facelifted it in much the way MG Rover here in Blighty would facelift their old cars, new lights & bumpers.

      Its an old trick, you don’t have change the metal work….which is VERY expensive.
      Then came the Cyber truck.
      It looks like an SUV version of a DeLorean. The Bed is useless & its off road use questionable ….
      Telsa makes most of its profit from Green credits & grants……these will be drying up now. Europe will/has turned on him. Blighty just outlawed his FSD bulsh1t………

      May be he himself is shorting the price?………i don’t think so but Tesla is now on a downward track. Its a target for WEF types

      1. Reply
        Finster says:

        So much trouble could be avoided by the government not trying to pick winners and losers in the economy. Subsidies and mandates create more problems than they solve. Besides electric cars, look at the mess they made in solar and wind. If discharging carbon into the atmosphere is regarded as a cost, then tax the carbon. That’s rationalizing externalities. Then let businessmen and engineers figure it out in the free market; politicians and bureaucrats only muck it up.

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