Fed Minutes: Inflation Still A Concern
A: Thank you Steven for pointing out the Fed Minutes and CPI data coming out this week. If you want to be a wise investor you must learn some of the essentials to what the fundamentals are telling us and where monetary policy is likely headed. Right now it looks like we got at least 1, possibly 2 more 1/4 point hikes coming.
According to the minutes:
"Although the stance of policy seemed close to where it needed to be given the current outlook, some future policy firming might be needed" to keep inflation and the economy on an even keel.
My very last post about this topic had me at about 75 - 25 in favor of another rate hike at the next fed meeting on March 27-28th. I'm also at about 50 - 50 right now for the meeting after that for a final rate hike. The data that comes out over the next few months will certainly dictate whether a 2nd rate hike is needed. I don't envy Bernanke now that he took over the helm because he is being faced with a housing cooldown, economic upturn, and signs of inflation all at the same time.
Historically, the fed seems to 'overshoot' on rate hikes and overdo it, so to speak. Its important to note that rate hikes take aprox. 6-10 months to take full effect leaving the fed to analyze data that has already occurred and NOT data that is yet to come from previous rate hikes!
~ Fed Leaves Door Open to Interest Rate Hike
