Fed FOMC Meeting May 2024 - My Take

The Federal Reserve's monetary policy drives every single asset price globally. Markets are focused on whether the Federal Open Markets Committee (FOMC) may delay rate cuts or even raise rates now that core inflation ticked up slightly in March. Markets now expect the first rate cut to be in September, but will the Fed hint that its policy rate will have to be higher for longer? Hear our concise summary of what the Fed says and our take on what it means for you.
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[@MarkCW]

Although the QYLD dividend is 12% per year the value is -1.08% over 1 year, so even if you re-invest the dividends the return over 1 year has only been 11.03%. Whereas the return of the NASDAQ over the past year has been 33.76%. So QYLD doesn't make any sense to me.

[@michaelstuart2856]

This feels like the new normal. Back to pre-globalisation economic management of gentle adjustment of rates and balance sheet management.

[@erandeser5830]

This issue merits serious preparation. Keep me posted.

[@shellyperera2010]

Another excellent video.

[@Pensioncraft]

Thanks again @shellyperera2010

[@theowenssailingdiary5239]

Good time for a holiday in Japan!

[@cockeyes]

Whats making inflation sticky?

[@theowenssailingdiary5239]

Qyld? Don't they write at the money calls? Surely this trends towards zero eventually..

[@hallucinogenix]

I see potential issues with MMF's in the US, and as a UK investor would be interested to know is the UK in a potentially similar position. I am invested in ''Sterling Short-Term Money Market Fund (VASTMGA)' and have concerns at the moment due to what is going on in the world. As this is supposed to be very safe is there any chance that i could lose everything with it being invested in UK treasuries and +A banks or is my only risk of losing a relatively small percentage if they break the buck'' - which would be bad but acceptable losses. Can i lose everything if there is a firesale if the UK stock market crashes ? Opinions welcome - thanks'

[@masterjointu]

Once the yield curve uninverts, high chances of a recession in US

[@user-yl4st7wi5w]

the new easing from the fed is "no hike" ha ha fed does need to support the US treasury market if japan and china are not buying.

[@thomascrew8268]

The consistent unimous voting by the FED is surely a behind the scenes agreement to boost credibility. No way they all agree that much. The SCOTUS has recently had a number of 9-0 decisions, which rarely happens. This came after calls to restack the court based on political leanings. Their unanimous decisions show they are capable of rising over politics and thus appear more credible.

[@AlexSuperTramp-]

Is this a bad thing though? Consensus while not 100% aligned is necessary to be effective

[@luis_g_77]

In the long run it will hurt credibility if they make huge misses like in 2021. An echo chamber isnt a good look either

[@musheopeaus4125]

Or they have been told to vote this way . Consensus is unnatural

[@thomascrew8268]

I don't recall the guy's name, but he has two Nobel Prizes in Economics. He said that having an inflation target of 2.0% that is an arbitrary round number with no economic science behind it undermines the FED's credibility. And taking interest rates to zero and pumping the bond market is what set off inflation. He was making the case that rates need to stay in the 3.0 - 3.5% range.

[@wpelfeta]

We all want them to lower interest rates, but lowering inflation will be better in the long run.

[@Jalleur14325]

I don't! I'd prefer an inflation beating savings rate

[@voice.of.reason]

5% is not high, it's low, they should jack to 8 % and be done with it, otherwise the Fed isn't in control of rates - inflation is..

[@Garcia061]

@@voice.of.reasonagreed

[@kinggeoffrey3801]

I would prefer a higher interest rate myself. I want the higher interest in savings to continue.

[@Ella-jx8by]

Increase them to a normal rate and then hold them there indefinitely

[@log874]

It was foolish to slow the rate of QT with inflation trending upwards. Slowing now will only result in the need for tighter policy later.

[@VegasMilgauss]

It’s trending downwards. Zoom out.

[@log874]

Well.....we'll see! I think a lot of people are in for a shock come Q4. No need to do anything right now that could let the genie back out of the lamp.

[@drscopeify]

You have to hit your economy really really hard to force it straight down to the ground without any variability along the path that's like a wrestling move not a economic policy. Already went from 9% to 3.4% the last bit is always slow but we shall see how the next months play out. Summer months then to be the moment of truth, if consumers freeze up, keep on as normal or go on a after-Covid party. You can kind of see this same thing play out after 2008, we had a scare in 2011-2013 and gold/silver went to the moon then came down hard the next year.

[@MagicNash89]

@@log874 And what exactly is so special about Q4?

[@log874]

Falls in the price of oil and natural gas have been flattering the headline inflation figures. That runs out of road in Q4. Unless there is a further leg down in the oil price, but I don't see that happening.