The next Fed rate-hike plan. 03/22/2023

So there is it. With all the crazy stuff that has happened, what is your vote on the Fed next week?

 

Why ask the obvious? If Powell had brains, SVB wouldn't have gone bankrupt. He would have foresaw that coming. He's now in a very tight spot. I bet he's like a deer in the headlights. (BTW what's the difference between lowering the rate and giving out free money to the depositors?)

No change in March but -25 bps in May.

 

I'm not asking anything. It is a poll, you silly.

Isn't it a bit early to call for a rate cut in May?

 

It's gonna happen. Just don't say I didn't (say it) when it happens.

 

That is quite stark. So make a poll! Go on, it is fun!

 

+25bps due to the failure of 3 out of 4300+ US banks, otherwise I would have still said +25bps. No changes to rate hike, but different language.

 

Interesting perspective.

 

To elaborate, I agreed with the previous +25 hike, but the language Powell used immediately following the hike - which he tried to walk back - was not fitting to the situation, I believed (in Feb) additional rate hikes would have been needed.

To touch on the collapse of the banks (SVB, SilverGate and the other), I do not believe they are the tip of the iceberg, rather than a failure to hedge interest rate risk and being "fringe-banks"; and CS is just being caught up in the drama.