In the latest report from the Federal Reserve, the expectations for inflation have massively increased this year following the ridiculous government spending from the radical left.
On Wednesday, The Federal Reserve “considerably raised its expectations for inflation this year and brought forward the time frame on when it will next raise interest rates,” CNBC reported. “However, the central bank gave no indication as to when it will begin cutting back on its aggressive bond-buying program, though Fed Chairman Jerome Powell acknowledged that officials discussed the issue at the meeting.”
Officials said that increases in interest rates could come as soon as after the 2022 midterms in 2023. However, they previously said that interest rates would not increase until at least 2024.
“This is not what the market expected,” James McCann, deputy chief economist at Aberdeen Standard Investments, told CNBC. “The Fed is now signaling that rates will need to rise sooner and faster, with their forecast suggesting two hikes in 2023. This change in stance jars a little with the Fed’s recent claims that the recent spike in inflation is temporary.”
“If you’re going to get two rate hikes in 2023, you have to start tapering fairly soon to reach that goal,” Kathy Jones, head of fixed income at Charles Schwab, told CNBC. “It takes maybe 10 months to a year to taper at a moderate pace. Then you’re looking at we need to start tapering maybe later this year, and if the economy continues to run a little bit hot, rate hikes sooner rather than later.”
JPMorgan Chase CEO Jamie Dimon warned that there is a very high likelihood that the inflation will not be temporary as the Biden administration has been trying to claim it will be.
Dimon said, “[Our bank has] a lot of cash and capability and we’re going to be very patient, because I think you have a very good chance inflation will be more than transitory.”
“If you look at our balance sheet, we have $500 billion in cash, we’ve actually been effectively stockpiling more and more cash waiting for opportunities to invest at higher rates,” Dimon said. “I do expect to see higher rates and more inflation, and we’re prepared for that.”