Second FOMC Meeting of 2023 Adjourned: United States Prime Rate Rises to 8.00%

United States Prime Rate

The Federal Open Market Committee (FOMC) of the Federal Reserve System has just adjourned its second monetary policy meeting of 2023 and, in accordance with our latest forecast, has voted to raise the benchmark target range for the federal funds rate to 4.75% - 5.00%. Therefore, the United States Prime Rate (a.k.a the Fed Prime Rate) is now 8.00%.

NB: U.S. Prime Rate = (The Fed Funds Target Rate + 3)

Here's a clip from today's FOMC press release (note text in bold):

"...Recent indicators point to modest growth in spending and production. Job gains have picked up in recent months and are running at a robust pace; the unemployment rate has remained low. Inflation remains elevated.

The U.S. banking system is sound and resilient. Recent developments are likely to result in tighter credit conditions for households and businesses and to weigh on economic activity, hiring, and inflation. The extent of these effects is uncertain. The Committee remains highly attentive to inflation risks.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to raise the target range for the federal funds rate to 4-3/4 to 5 percent. The Committee will closely monitor incoming information and assess the implications for monetary policy. The Committee anticipates that some additional policy firming may be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time. In determining the extent of future increases in the target range, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans. The Committee is strongly committed to returning inflation to its 2 percent objective.

In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michael S. Barr; Michelle W. Bowman; Lisa D. Cook; Austan D. Goolsbee; Patrick Harker; Philip N. Jefferson; Neel Kashkari; Lorie K. Logan; and Christopher J. Waller..."

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Seventh FOMC Meeting of 2022 Adjourned: United States Prime Rate Rises to 7.00%

United States Prime Rate

The Federal Open Market Committee (FOMC) of the Federal Reserve System has just adjourned its seventh monetary policy meeting of 2022 and, in accordance with our latest forecast, has voted to raise the benchmark target range for the federal funds rate to 3.75% - 4.00%. Therefore, the United States Prime Rate (a.k.a the Fed Prime Rate) is now 7.00%.

NB: U.S. Prime Rate = (The Fed Funds Target Rate + 3)

Here's a clip from today's FOMC press release (note text in bold):

"...Recent indicators point to modest growth in spending and production. Job gains have been robust in recent months, and the unemployment rate has remained low. Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures.

Russia's war against Ukraine is causing tremendous human and economic hardship. The war and related events are creating additional upward pressure on inflation and are weighing on global economic activity. The Committee is highly attentive to inflation risks.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to raise the target range for the federal funds rate to 3-3/4 to 4 percent. The Committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time. In determining the pace of future increases in the target range, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in the Plans for Reducing the Size of the Federal Reserve's Balance Sheet that were issued in May. The Committee is strongly committed to returning inflation to its 2 percent objective.

In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on public health, labor market conditions, inflation pressures and inflation expectations, and financial and international developments.

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michael S. Barr; Michelle W. Bowman; Lael Brainard; James Bullard; Susan M. Collins; Lisa D. Cook; Esther L. George; Philip N. Jefferson; Loretta J. Mester; and Christopher J. Waller..."

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Sixth FOMC Meeting of 2022 Adjourned: United States Prime Rate Rises to 6.25%

United States Prime Rate

The Federal Open Market Committee (FOMC) of the Federal Reserve System has just adjourned its sixth monetary policy meeting of 2022 and, in accordance with our latest forecast, has voted to raise the benchmark target range for the federal funds rate from 2.25% - 2.50%, to 3.00% - 3.25%. Therefore, the United States Prime Rate (a.k.a the Fed Prime Rate) is now 6.25%.

NB: U.S. Prime Rate = (The Fed Funds Target Rate + 3)

Here's a clip from today's FOMC press release (note text in bold):

"...Recent indicators point to modest growth in spending and production. Job gains have been robust in recent months, and the unemployment rate has remained low. Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures.

Russia's war against Ukraine is causing tremendous human and economic hardship. The war and related events are creating additional upward pressure on inflation and are weighing on global economic activity. The Committee is highly attentive to inflation risks.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to raise the target range for the federal funds rate to 3 to 3-1/4 percent and anticipates that ongoing increases in the target range will be appropriate. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in the Plans for Reducing the Size of the Federal Reserve's Balance Sheet that were issued in May. The Committee is strongly committed to returning inflation to its 2 percent objective.

In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on public health, labor market conditions, inflation pressures and inflation expectations, and financial and international developments.

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michael S. Barr; Michelle W. Bowman; Lael Brainard; James Bullard; Susan M. Collins; Lisa D. Cook; Esther L. George; Philip N. Jefferson; Loretta J. Mester; and Christopher J. Waller..."

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Fifth FOMC Meeting of 2022 Adjourned: United States Prime Rate Rises to 5.50%

United States Prime Rate

The Federal Open Market Committee (FOMC) of the Federal Reserve System has just adjourned its fifth monetary policy meeting of 2022 and, in accordance with our latest forecast, has voted to raise the benchmark target range for the federal funds rate from 1.50% - 1.75%, to 2.25% - 2.50%. Therefore, the United States Prime Rate (a.k.a the Fed Prime Rate) is now 5.50%.

NB: U.S. Prime Rate = (The Fed Funds Target Rate + 3)

Here's a clip from today's FOMC press release (note text in bold):

"...Recent indicators of spending and production have softened. Nonetheless, job gains have been robust in recent months, and the unemployment rate has remained low. Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures.

Russia's war against Ukraine is causing tremendous human and economic hardship. The war and related events are creating additional upward pressure on inflation and are weighing on global economic activity. The Committee is highly attentive to inflation risks.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to raise the target range for the federal funds rate to 2-1/4 to 2-1/2 percent and anticipates that ongoing increases in the target range will be appropriate. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in the Plans for Reducing the Size of the Federal Reserve's Balance Sheet that were issued in May. The Committee is strongly committed to returning inflation to its 2 percent objective.

In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on public health, labor market conditions, inflation pressures and inflation expectations, and financial and international developments.

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michael S. Barr; Michelle W. Bowman; Lael Brainard; James Bullard; Susan M. Collins; Lisa D. Cook; Esther L. George; Philip N. Jefferson; Loretta J. Mester; and Christopher J. Waller..."

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Odds Now At 100% (Certain) The U.S. Prime Rate Will Rise To At Least 5.50% After The July 27, 2022 FOMC Monetary Policy Meeting

Prime Rate Prediction

Prime Rate Forecast

As of right now, our odds are at 100% (certain) the Federal Open Market Committee (FOMC) will vote to raise the target range for the benchmark fed funds rate, from the current 1.50% - 1.75%, to at least   2.25% - 2.50%, at the July 27^TH, 2022 monetary policy meeting, with the U.S. Prime Rate (a.k.a Fed Prime Rate) rising to at least 5.50% -- with the strong possibility of an increase to 5.75%.

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Ugly Inflation Readings

Year-on-year (YoY), the Consumer Price Index for June 2022 came in at a scary 9.06%, which instantly caused many rate watchers, including this shop, to predict that the Fed is likely to raise short-term rates by 100 basis points (1.00 percentage point) 13 days from now (July 27.)   

Also very notable: This morning's Producer Price Index (PPI) reading for June, which came in at 11.3% YoY, was higher than all credible forecasts. The all-time , YoY record-high for the PPI was set a few months back: the March 2022 reading was 11.6%.

Stay tuned.........

 

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The United States Prime Rate was raised to the current 4.75% on June 15^TH, 2022.

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Coronavirus COVID-19 Reminder:

Symptoms of COVID-19, which may appear 2-14 days after exposure, include:

• Fever
• Cough
• Shortness of breath

Emergency warning signs for COVID-19 include:

• Difficulty breathing or shortness of breath
• Persistent pain or pressure in the chest
• New confusion or inability to arouse
• Bluish lips or face

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--  Stop The Spread of Germs (PDF) --

-- What To Do If You Are Sick (PDF) --

-- Novel COVID-19 Coronavirus UPDATES --

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NB: U.S. Prime Rate = (The Fed Funds Target Rate + 3)

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Stay tuned for the latest odds, and for current U.S. economic data (inflation, jobs, economic growth, wages, etc.) 

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Current Odds

• Current odds the U.S. Prime Rate will rise to at least 5.50% after the July 27^TH, 2022 FOMC monetary policy meeting, with a strong possibility of an increase to 5.75%: 100% (certain.)
  
  

• NB: United States Prime Rate = (The Fed Funds Target Rate + 3)

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FOMC Meeting Schedule for 2023

Here's the 2023 meeting schedule for the Federal Open Market Committee (FOMC.)

Why is this schedule important to you? Because it's at these monetary policy meetings that the FOMC votes on whether to raise, lower or make no changes to the target range for Fed Funds Target Rate, and when the Fed Funds Target Rate changes, the United States Prime Rate (also known as the Fed Prime Rate) will also change (how the United States Prime Rate works):

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• February 1, 2023
  

• March 22, 2023
  

• May 3, 2023

• June 14, 2023

• July 26, 2023

• September 20, 2023
  
  

• November 1, 2023
  
  

• December 13, 2023

 

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Odds At 100% (Certain) The U.S. Prime Rate Will Rise To At Least 5.25% After The July 27, 2022 FOMC Monetary Policy Meeting

Prime Rate Prediction

Prime Rate Forecast

As of right now, our odds are at 100% (certain) the Federal Open Market Committee (FOMC) will vote to raise the target range for the benchmark fed funds rate, from the current 1.50% - 1.75%, to at least   2.00% - 2.25%, at the July 27^TH, 2022 monetary policy meeting, with the U.S. Prime Rate (a.k.a Fed Prime Rate) rising to at least 5.25% (with the strong possibility of an increase to 5.50%.)

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Economic alarm bells are still clanging here in the USA, and in many other industrialized economies around the world. Inflation is the #1 concern, of course, but soaring mortgage rates and home prices have the real-estate world nervous as well.

Relief may be in the offing. The Core PCE Price Index -- the Fed's preferred inflation gauge -- may have peaked.  The latest year-on-year readings:

• February: +5.3%
• March: +5.2%
• April: +4.9%

And if inflation is really retreating, then mortgage rates will ease as well. That's because the giant pools of capital that move in and out of U.S. Treasuries should start to swing into the safety of government debt, and cause bond yields to start easing.

We'll get the next Core PCE reading on Thursday, June 30, 2022.

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The pandemic isn't over folks.  Please be careful out there! We implore you to keep masking up, even if you are vaccinated.

>> #MaskUP <<

Stay tuned....

 

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The United States Prime Rate was raised to the current 4.75% on June 15^TH, 2022.

=======

Coronavirus COVID-19 Reminder:

Symptoms of COVID-19, which may appear 2-14 days after exposure, include:

• Fever
• Cough
• Shortness of breath

Emergency warning signs for COVID-19 include:

• Difficulty breathing or shortness of breath
• Persistent pain or pressure in the chest
• New confusion or inability to arouse
• Bluish lips or face

=======

--  Stop The Spread of Germs (PDF) --

-- What To Do If You Are Sick (PDF) --

-- Novel COVID-19 Coronavirus UPDATES --

=======

NB: U.S. Prime Rate = (The Fed Funds Target Rate + 3)

=======

Stay tuned for the latest odds, and for current U.S. economic data (inflation, jobs, economic growth, wages, etc.) 

======= 

Current Odds

• Current odds the U.S. Prime Rate will rise to at least 5.25% after the July 27^TH, 2022 FOMC monetary policy meeting, with a strong possibility of an increase to 5.50%: 100% (certain.)
  
  

• NB: United States Prime Rate = (The Fed Funds Target Rate + 3)

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Fourth FOMC Meeting of 2022 Adjourned: United States Prime Rate Rises to 4.75%

United States Prime Rate

The Federal Open Market Committee (FOMC) of the Federal Reserve System has just adjourned its fourth  monetary policy meeting of 2022 and, in accordance with our latest forecast, has voted to raise the benchmark target range for the federal funds rate from 0.75% - 1.00%, to 1.50% - 1.75%. Therefore, the United States Prime Rate (a.k.a the Fed Prime Rate) is now 4.75%.

NB: U.S. Prime Rate = (The Fed Funds Target Rate + 3)

Here's a clip from today's FOMC press release (note text in bold):

"...Overall economic activity appears to have picked up after edging down in the first quarter. Job gains have been robust in recent months, and the unemployment rate has remained low. Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher energy prices, and broader price pressures.

The invasion of Ukraine by Russia is causing tremendous human and economic hardship. The invasion and related events are creating additional upward pressure on inflation and are weighing on global economic activity. In addition, COVID-related lockdowns in China are likely to exacerbate supply chain disruptions. The Committee is highly attentive to inflation risks.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to raise the target range for the federal funds rate to 1‑1/2 to 1-3/4 percent and anticipates that ongoing increases in the target range will be appropriate. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in the Plans for Reducing the Size of the Federal Reserve's Balance Sheet that were issued in May. The Committee is strongly committed to returning inflation to its 2 percent objective.

In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on public health,  labor market conditions, inflation pressures and inflation expectations, and financial and international developments.

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michelle W. Bowman; Lael Brainard; James Bullard; Lisa D. Cook; Patrick Harker; Philip N. Jefferson; Loretta J. Mester; and Christopher J. Waller. Voting against this action was Esther L. George, who preferred at this meeting to raise the target range for the federal funds rate by 0.5 percentage point to 1-1/4 percent to 1-1/2 percent. Patrick Harker voted as an alternate member at this meeting..."

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Odds At 100% (Certain) The U.S. Prime Rate Will Rise To At Least 4.50% After The June 15, 2022 FOMC Monetary Policy Meeting

Prime Rate Prediction

Prime Rate Forecast

As of right now, our odds are at 100% (certain) the Federal Open Market Committee (FOMC) will vote to raise the target range for the benchmark fed funds rate, from the current 0.75% - 1.00%, to at least   1.25% - 1.50%, at the June 15^TH, 2022 monetary policy meeting, with the U.S. Prime Rate (a.k.a Fed Prime Rate) rising to at least 4.50% (with the possibility of an increase to 4.75%.)

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Fed Boss Jerome Powell said this at the May 4 post-FOMC-meeting announcement: 

 

"...Sure. So 75 basis point increase is not something the committee is actively considering. What we are doing is we raised 50 basis points today. And we said that, again, assuming that economic and financial conditions evolve in ways that are consistent with our expectations, there's a broad sense on the committee that additional 50 basis increases should be on, 50 basis points should be on the table for the next couple of meetings. So we're going to make those decisions at the meetings, of course, and we'll be paying close attention to the incoming data and the evolving outlook, as well as to financial conditions..."

 

Nevertheless, a 75 basis point (0.75 percentage point) increase is possible for the June 15^TH meeting, due in large part to Thursday's Productivity and Labor Costs report for Q1, 2022. Year-on-year, productivity declined by 0.6% (bad), while unit labor costs increased by 7.2% (even worse!) 

Moreover, according to the April 2022 Jobs report, average hourly earnings rose by a hefty 5.464% compared to a year ago, and the most recent Core PCE inflation reading was 5.2%.

Stay tuned......

 

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The current U.S. Prime Rate was raised to the current 4.00% on May 4^TH, 2022.

=======

Coronavirus COVID-19 Reminder:

Symptoms of COVID-19, which may appear 2-14 days after exposure, include:

• Fever
• Cough
• Shortness of breath

Emergency warning signs for COVID-19 include:

• Difficulty breathing or shortness of breath
• Persistent pain or pressure in the chest
• New confusion or inability to arouse
• Bluish lips or face

=======

--  Stop The Spread of Germs (PDF) --

-- What To Do If You Are Sick (PDF) --

-- Novel COVID-19 Coronavirus UPDATES --

=======

NB: U.S. Prime Rate = (The Fed Funds Target Rate + 3)

=======

Stay tuned for the latest odds, and for current U.S. economic data (inflation, jobs, economic growth, wages, etc.) 

======= 

Current Odds

• Current odds the U.S. Prime Rate will rise to at least 4.50% after the June 15^TH, 2022 FOMC monetary policy meeting, with the possibility of an increase to 4.75%: 100% (certain.)
  
  

• NB: United States Prime Rate = (The Fed Funds Target Rate + 3)

=========

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Third FOMC Meeting of 2022 Adjourned: United States Prime Rate Rises to 4.00%

United States Prime Rate

The Federal Open Market Committee (FOMC) of the Federal Reserve System has just adjourned its third monetary policy meeting of 2022 and, in accordance with our latest forecast, has voted to raise the benchmark target range for the federal funds rate from 0.25% - 0.50%, to 0.75% - 1.00%. Therefore, the United States Prime Rate (a.k.a the Fed Prime Rate) is now 4.00%.

NB: U.S. Prime Rate = (The Fed Funds Target Rate + 3)

Here's a clip from today's FOMC press release (note text in bold):

"...Although overall economic activity edged down in the first quarter, household spending and business fixed investment remained strong. Job gains have been robust in recent months, and the unemployment rate has declined substantially. Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher energy prices, and broader price pressures.

The invasion of Ukraine by Russia is causing tremendous human and economic hardship. The implications for the U.S. economy are highly uncertain. The invasion and related events are creating additional upward pressure on inflation and are likely to weigh on economic activity. In addition, COVID-related lockdowns in China are likely to exacerbate supply chain disruptions. The Committee is highly attentive to inflation risks.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. With appropriate firming in the stance of monetary policy, the Committee expects inflation to return to its 2 percent objective and the labor market to remain strong. In support of these goals, the Committee decided to raise the target range for the federal funds rate to 3/4 to 1 percent and anticipates that ongoing increases in the target range will be appropriate. In addition, the Committee decided to begin reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities on June 1, as described in the Plans for Reducing the Size of the Federal Reserve's Balance Sheet that were issued in conjunction with this statement.

In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals. The Committee's assessments will take into account a wide range of information, including readings on public health, labor market conditions, inflation pressures and inflation expectations, and financial and international developments.

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michelle W. Bowman; Lael Brainard; James Bullard; Esther L. George; Patrick Harker; Loretta J. Mester; and Christopher J. Waller. Patrick Harker voted as an alternate member at this meeting..."

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Odds At 100% (Certain) The U.S. Prime Rate Will Rise After The May 4, 2022 FOMC Monetary Policy Meeting

Prime Rate Prediction

Prime Rate Forecast

As of right now, our odds are at 100% (certain) the Federal Open Market Committee (FOMC) will vote to raise the target range for the benchmark fed funds rate, from the current 0.25% - 0.50%, to either  0.50% - 0.75%, or 0.75% - 1.00%, at the May 4^TH, 2022 monetary policy meeting, with the U.S. Prime Rate (a.k.a Fed Prime Rate) rising to either 3.75% or 4.00%.

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Here's most of the text (note text in bold) from yesterday's speech by Fed Boss Jay Powell at the National Association for Business Economics (NABE) Conference:

 "...Let me first pause to recognize the many millions who are suffering the traffic consequences of the invasion of Ukraine today. At the federal reserve our monetary policy is by the dual mandate to provide maximum employment and stable prices. That standpoint the current picture is plain to see for the labor market is very strong, and inflation is much too high. My colleagues and I are acutely aware inflation poses significant hardship especially on those least able to meet the cost there is an obvious need to move expeditiously to return the stance of monetary policy to a more neutral level into a more restrictive level if that is what is required for price stability.

We are committed to restoring price stability while preserving a strong labor market. At our meeting that concluded last week we took several steps in pursuit of these goals. We raised our policy interest rate for the first time since the start of the pandemic. We anticipate ongoing rate increases will be appropriate to reach our objectives. We also expect that a common meeting. In the press conference after the meeting I noted action could come as soon as our next meeting and may but it is not a decision we have made. These actions along with the adjustments we have made since last fall represent a substantial policy with the intention of restoring price stability.

In my comment today I will first discuss the economic conditions that warrant these actions and then address the path ahead for monetary policy. To begin with employment, and the last few years of historically long expansion that ended with the arrival of the pandemic you see the remarkable benefits of an extended period of a strong labor market conditions. We seek to foster a another long expansion in order to realize those benefits again. Labor market has substantial momentum and powered through the difficult omicron wave.

Adding 1.75 Million jobs over the past three months. The unemployment rate has fallen to 3.8%, Near historical lows. It has reached this level up much than anticipated by most forecasters. While disparities in employment remain, job growth has been widespread across racial, ethnic and demographic roots. By many measures the labor market is extremely tight. Significantly tighter than the very strong job market just before the pandemic for their far more job openings going unfilled today the before the pandemic.

Despite the unemployment rate being higher. Indeed there are record 1.7 Posted job openings for each person looking for work. Record numbers of people are quitting jobs each month, typically to take another job at higher pay. Nominal wages are rising at the fastest pace in decades. With the gains are strongest for those at the lower end of the wage distribution and nonsupervisory workers. It is worth considering why the labor market is so tight given the unemployment rate is actually higher than it was before the pandemic.

One explanation is a natural rate of unemployment may be temporarily elevated so that wage pressure is greater when the level of unemployment. The delta and omicron variances complicate hiring, and the strong position of households may have allowed some to be more selective in their job search. They might expect the factors to fade, reducing the pressure in the job market.

A second source of a labor market is that the labor participation rate below its pre-pandemic trend. Little demand measured by total employment plus posted job openings, has substantially recovered and far exceeds the size of the workforce. About half of the shortfall in labor force is attributable to during the pandemic history suggests most of the retirees are unlikely to reenter the workforce sprayed some non-participation is due to factors that may fade with time such as caregiving needs and fear of contracting COVID-19. With prime age participation well below its level there's room for further progress a more complete rebound however is likely to take some time. Increases in labor force participation also substantially lag declines in employment.

Overall, labor market is strong but showing a clear imbalance of supply and demand. With labor supply in the near term with a long expansion the factors holding back supply will likely ease. In the meantime we aim to use our tools to moderate demand growth thereby facilitating continued sustainable increase of employment and wages. Turning to price stability inflation outlook had deteriorated significantly even before Russia's invasion.


A rise in inflation has been much greater and more persistent than forecasters generally expected. For example at the time of her june 2021 meeting every participant at all but 135 submissions predicted 2021 headlight PCE inflation on it cute for basis would be below 4%. Inflation came in at 5.5%. For a time, moderate inflation forecast look plausible, the one-month headline of core inflation rates declined steadily from April through September. But inflation moved up sharply in the fall just since our December meeting the gear jump from 2.6% To 4.3%. Why have the forecast been so far off? A combination of a surge in goods demand and sharply rising goods prices. Most notable example here is motor vehicles. Prices soared across the vehicle sector; demand was met by a sharp decline in global production during the summer of 2021. Shortages of computer chips production remains below pre-pandemic levels and an expected sharp decline in prices has been repeatedly postponed. Many forecasters including participants have been expecting inflation to cool in the second half of last year. The economy started going back to normal after vaccines became widely available. Expectations for the supply side damage would continue to heal preschools would reopen allowing parents to go back to work and labor supply would begin bouncing back. Kinks and supply chain would begin resolving a consumption of a start rotating to services all of which would help reduce price pressures.


While schools are open none of the other expectations COVID-19 has not gone away with the arrival of vaccines. In fact were now headed once again into more covid related supply disruptions, this time from china. It continues to seem likely the hope for supply side healing will come over time as the world settles into some new normal. But the timing and scope of that relief are highly uncertain. In the meantime, as a wheat set policy we will be looking to actual progress on these issues and not assuming significant near-term supply relief. As the magnitude and persistence of the increase in inflation became increasingly clear of the second half of last year, and as the seller rated beyond expectations, the f once he pivoted to progressively less accommodative monetary policy in june the participant projected funds rate will be effective lower it to the end of 2022. And as the news came in the projected policy paths shifted higher.

 

 

The median projection that accompanied last week's 25 business point rate increase, shows the fellow funds rate at 1.9% At the end of this year. When rising above its estimated longer run normal value in 2023. The last statement also indicates the committee expects to begin reducing the size of our balance sheet in the coming meeting. I believe that these policy actions and those to come will help bring inflation down near 2% over the next three years. As always, our policy projections are not a committee decision or fixed plan. Instead they are a summary of what participants see as the most likely case going forward. The events of the past four weeks remind us that in tumultuous times, what seems the most likely scenario may change quite quickly, and can become outdated quickly at times like these when events are developing rapidly. Thus, my main message today is as the outlook evolves we will adjust policy as needed.


In addition to the direct effects from the oil and commodity prices, the evasion and related events are likely to restrain economic activity abroad and further disrupt the supply chains which would create a spillover stimulus economy. We might look at a historical experience with oil price shocks in the 1970s.Fortunately the united states is much better situated to oil the shocks and we are the largest producer of oil and the economy is significantly less intensive than the 1970s.Today the rise in oil prices has mixed affects on the economy, lowering the household income and raising investment and drilling overtime and benefiting oil-producing areas in general. On the net, oil shocks tend to weigh on it by far less in the 1970s. Second question, how likely is it the monetary policy can lower inflation without causing a recession? Our goal is to restore the price stability while fostering another expansion and sustaining a strong labor market. In the fomc projections I just described, the economy achieves a soft landing with inflation coming down and unemployment holding steady. Growth slows and the faster growth from the early stages of the reopening affects the fiscal support in the monetary policy is removed. Some argue that it stacks against the soft landing and pointed topoint to the 1994 episode as the only successful soft landing in the postwar period. I believe the historical record provides some grounds for optimism. Soft or at least soft dish have been common in the history.


In three episodes, 1965, 1984 and 1984, the fed raised [short-term rates] significantly in response to the perceived overheating without precipitating the recession. In other cases, the recessions chronologically followed the conclusion of the tightened cycle but the recessions were not apparently due to excessive tightening of the monetary policy. I think a recent example that hardening from 2015 to 2019 was followed by the pandemic. Now I hasten to add that no one expects bringing it about will be straightforward in the current context. Very little is straightforward in the context and monetary policy is often said to be a blunt instrument not capable of surgical precision. My colleagues and I will do our best to succeed in this challenging task and it is worth noting that today the economy is very strong and well positioned to handle the tight monetary policy. Third and finally, what will it take to restore price stability? The ultimate responsibly for the price stability rests with the federal reserve. Price stability is essential if we are going to have another sustaining period of the labor market conditions. I believe that the policy approach that I've laid out is well-suited to achieving this outcome.


We will take the necessary steps to ensure a return to stability and in particular, if we conclude and it's appropriate to move more aggressively by raising the federal fund rate by more than 25 basis points, we will do so.


And if we determine we need to tighten beyond common measures of neutral to a more restrictive stance, we will do that as well. Our monetary policy framework emphasizes that having longer-term inflation expectations angered at the longer-term objective of 2% helps us achieve both of our dual mandate objectives. While we cannot measure longer-term expectations directly, we monitor a variety of the market-based indicators.


The added pressure from the invasion of Ukraine on inflation from energy and other commodities comes at a time of already too high inflation. In normal times, when unemployment and inflation are close to these objectives, the monetary policy would look through a brief version associated with of the commodity price shocks. However, the risk is rising that an extended period of inflation could push longer-term expectations uncomfortably higher, which underscores the need for the committee to move expeditiously as I have described. To conclude, the past two years have been extraordinarily challenging.


Two years ago more than 20 million people were losing their jobs. Millions were falling ill and lives were being disrupted and destroyed. We have made enormous strides since then. Today as I've discussed the labor market is very strong but to end where I began, inflation is much too high. We have the necessary tools and we will use them to restore price stability..."

 

 

Click the following link to watch the video:

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In pandemic news: as of right now, there are 81,476,269 total cases of COVID-19, and a total of 999,792 deaths in the United States. The death count could easily pass the 1,000,000 mark this month.  Stay tuned...

 

Coronavirus Pandemic: Please Keep Your Distance!

 

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>> http://bit.ly/COVID-Pandemic <<

 

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The current U.S. Prime Rate was raised to the current 3.50% on March 16^TH, 2022.

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Coronavirus COVID-19 Reminder:

Symptoms of COVID-19, which may appear 2-14 days after exposure, include:

• Fever
• Cough
• Shortness of breath

Emergency warning signs for COVID-19 include:

• Difficulty breathing or shortness of breath
• Persistent pain or pressure in the chest
• New confusion or inability to arouse
• Bluish lips or face

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--  Stop The Spread of Germs (PDF) --

-- What To Do If You Are Sick (PDF) --

-- Novel COVID-19 Coronavirus UPDATES --

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NB: U.S. Prime Rate = (The Fed Funds Target Rate + 3)

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Stay tuned for the latest odds, and for current U.S. economic data (inflation, jobs, economic growth, wages, etc.) 

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Current Odds

• Current odds the United States Prime Rate will rise to either 3.75% or 4.00% after the May 4^TH, 2022 FOMC monetary policy meeting: 100% (certain.)
  
  

• NB: United States Prime Rate = (The Fed Funds Target Rate + 3)

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