Fed Balks At Interest Rate Cuts, But Says Hikes Unlikely | Axel Merk
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Yesterday, May 1 2024, the Federal Reserve issued its latest policy statement, followed by a press conference by Fed Chair Jerome Powell.
The Fed held its policy interest rate steady at 5.25%, as expected. Somewhat surprising to Wall Street was the Fed's announcement that it will reduce the scope of its Quantitative Tightening program starting in June. US Treasury roll-off will be reduced to $25 billion per month, down from the current $60 billion per month.
Above and beyond that, Jerome Powell admitted that inflation is proving more stubborn to tame than the Fed hoped at the start of the year, and that getting it down sustainably to the Fed's 2% target will "take longer than previously expected". This essentially is admitting that interest rates will stay high for EVEN longer.
In this video, Fed-watcher Axel Merk of Merk Investments joins Thoughtful Money host Adam Taggart to provide an immediate reaction to the Fed's guidance and take live Q&A from the viewing audience.
#interestrates #inflation #federalreserve
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Hello Adam, I have been listening to your podcast regularly for about 6 months now. Here is my feedback (1) please create time stamp segments for the videos and name them for the viewers who don't want to listen to the whole video. (2) Please try to keep your questions short, avoid injecting your opinion, and let the guest answer. The David Lin Report channel on TH-cam is a good example where both suggestions are implemented in every video. thank you and wish you the best of luck.
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Invest in real estate, ETFs and high-yield savings account.
Just buy Gold and protect your assets, the stock market is a rollercoaster.
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I like these live events, Adam. This session after the Fed meeting was excellent. Thank you.
Love Axel, thanks for having him back
Brilliant interview
Interest rates are NOT coming down! The excessive spending by the government ($1 trillion every 100 days) is extremely out of control. It guarantees that interest rates will rise irrespective of what the Fed wants.
Rates will come down when unemployment starts coming up.
Yes, short term rates. But i think he means long term rates will just bounce back and rise even if there's a dip due to Fed policy.
You are correct! Easy Math plus US weaponizing financials foreign countries will dump US treasuries.
@@ImRickSanchez 100% wrong. Like 99.99999% of people you have NO CLUE about what IS REALLY HAPPENING. IRs aren't high by historical measures, and STILL WELL BELOW ACTUAL INFLATION. Any rate cuts WILL KILL the $ and inflation would SKYROCKET immediately along WITH EVERYTHING ELSE priced in fiat currencies
All fiat paper is being killed especially the USD. We are already in hyperinflation, the price of Gold says so. By the time you realize that you have $$$MILLIONS OF WORTHLESS FIAT DOLLARS, you won't be able to get rid of them fast enough. You'll see more clearly in 2025.
Printing money creates inflation. Interest rates stall the economy. Stagflation.
They will cause a crash and buy everything at half price as they did in 2008-2011.
I really wish Adam would bring back the time stamps on these videos. Most people don't have the time to sit through an hour and half video. Always good info but let the viewers choose what topics they want to watch.
I agree. Maybe he needs to get his tech person on this.
Agreed!
I won't watch any video now over 15mins. content is increasing exponentially
TWO TIMES THE SPEED BOI!.
There's an unfortunate tendency with all the podcasts I follow to get longer and longer.
Nice job- I like the mix of formats. Keep designing and developing your venue- it is great!
This was very interesting. Axel clearly is an individual thinker, intellectual and knows his stuff on economy at deep level. Yes, want to see more of this, thank you.
Yes more of this format please
Really appreciate these fed reaction videos
Mahalo for hosting this! 🤙🏻
When you work on something that only has the capacity to make you 5 dollars, it does not matter how much harder you work - the most you will make is 5 dollars.
People dont understand that the prices of things are never going back down. This inflation is deeper than we think. Those buying groceries are well aware that the real inflation is much over 10%. The increments dont match our income, yet certain investors still earn over $365,000 in stocks and assets. Wish I could accomplish that.
Very possible! especially at this moment. Profits can be made in many different ways, but such intricate transactions should only be handled by seasoned market professionals.
Finding yourself a good broker is as same as finding a good wife, which you go less stress, you get just enough with so much little effort at things
Brian demonstrates an excellent understanding of market trends, making well informed decisions that leads to consistent profit
I'm surprised that you just mentioned and recommend Mr Brian Nelson. I met him at a conference in 2018 and we have been working together ever since.
These live interactive events are excellent! Keep them going!
Axel love your humility and intelligence I wish you would have done more that gold.
Great show..
Good interview!
Any thoughts on bringing someone in to discuss BRICS and our economy?
He should just come out to the microphones and say the following: Spending is out of control, with 2+ Trillion structural deficits, so interest rates must remain permanently elevated to counteract that ongoing inflationary stimulus. If you have a problem with that, consult with your elected officials. And by the way, borrowing money should have a cost associated with it, so interest rates are never going back to zero. Have a nice day.
Yet it’s funny. Somehow inflation gets pegged on the Fed, like it’s some Mystery or the Fed is the guy behind the curtain. It’s not the Fed, Greedy companies or Putin. It’s the US Gov causing the inflation - they are the guy behind the curtain. This stuff should be a required education.
Risk has a cost. But somehow, institutions and banks see no cost. No wonder the public thinks they should be bailed out, the Gov has bailed out Everyone Else no matter how despicable or irresponsible their actions.
Good episode. I think I might be addicted to your show.
My oppinion is they cause a recession on purpose. If everyone flees stocks and buys bonds it causes rates to fall and the government doesnt have to pay as much money in interest
That’s the no brainer approach they should be taking. Every cycle needs a recession. The quicker we get through it the quicker we rebound
i'm afraid many will run to bonds and get their ROI's inflated away come next printing campaign..
Thanks! Great interview.
Thank you very much!!
I highly recommend these live reaction videos; fresh news and perspective is more appealing than old news.
Economic investigator Frank G Melbourne Australia is following this informative content cheers Frank 😊
Adam - a few months ago you interviewed a guy who invests in corporate Bonds and high dividend stocks. I’d love to hear from him again. Sorry but I can’t remember his name.
There aren't any recent interviews of Mike "Mish" Shedlock on TH-cam. I'm dying to listen to his takes.
What are your thoughts on Muni bond funds? Short term in particular.
Always hear (There were 20% mortgages rates in the 80s) , Yes , However, it also meant a return on investments for banking accounts that was the same or a better return than the stock market . Which encouraged people to save. There was not this stock market frenzy and huge household debt. Also mortgage rates doubling may mean a huge difference for people's monthly payments further harming already deeply indebted people.
When they made all retirement plans 401k and did away with pensions. Now the market crash takes on a whole new meaning-and people have saved for a very long time but risk losing it all.
New Definitions from the Fed: 1.Quantitative Tightening - Hinting at possibly raising interest rates in the future 2. Quantitative Easing- Hinting at possibly lowering interest rates in the future.
Yes, appreciate the format! Please invite a guest to comment on any breaking news.
Axel is spot on about the 2% being made up. It's actually more pernicious than that. The 2% thing came from wanting to find a way to justify that level of inflation, because the economic model is built on that. If we didn't have prices going up then the growth figures wouldn't have looked nearly as rosy as they have. Sadly for the ordinary person this premise led to a rising cost of living, even pre - pandemic.
It's an amount the shepple won't complain or recognize they are being robbed by the machine.
We should all be happy to have to work AT LEAST 2% harder each year to maintain our standard of living.
Me thinketh isn't one of the best compliments for an., interview to get is that........someone has been listening!@!?😉
Powell should be targeting NEGATIVE 2% (deflation), not plus 2%.
Love you comment Adam about " I don't know if Powel is being sincere in helping lower middle class" rephrasing it it off course!
The number one priority for the Fed should be to maintain confidence in the currency. The inflation target should be zero.
But what about fiscal policy? I think the fed has less power than advertised.
Fiscal policy will change after election
Thank you Adam
Time stamps would be very helpful.
20:33 for all the time stampers, there you go.
That's the main point IMHO.
"It ain't the things you don't know that gets you, it's the things you think you know for sure but just ain't so"
Bring back the time stamps on the videos
Axel is bringing clarity and nuances refusing to follow loaded questions😊
1st, 2 May 2024
Keep up the live reaction videos, please.
With energy costs higher for companies such as shipping , Electric, overhead, maintenance , many companies will have to lay off people because the bottom line is getting shaved by inflation.
you just exactly described stagflation. 1973 and 1979
Axel is a brilliant interviewee. Not only does he speak in a way that most folks can understand and understand and with obvious wisdom but he says it in a non partisan manner - and all in a second language. Utter genius.
Press conferences are so that the insiders can front run the market.
Can you all please send me a link to the experts. Thanks
How should you invest, I had a stock, bond, CD’s but never Treasuries, should I invest I. Those. Also,would it be okay if I follow both of you on LinkedIn?
i liked the Greenspan Briefcase indicator it was fun to see how WallStreet would react. guess I'm dating myself
My husband and I have been waiting for a couple years to sell our house and move into a larger house preferably a small acreage to get out of the city. We grew up in the country and miss that life. Since we have equity in our current home and will be moving up, do you recommend we wait for it to soften more or do we move now? Everyone talks about first time homebuyers needing to wait, but what about the move up buyers? We would be going from a 450k home to a 650-725k price point in the midwest.
So true. There seems to be no value added to all of the mystical forward guidance and the psychic interpretation that follows.
Don't know why these guys keep saying Powell is looking for an excuse to cut, yet the explanation is always it's not the right time and he's waiting on the data. So, how is he looking for excuses to do as he pleases? The 1.6% GDP wasn't an excuse? Since we know the Fed is always late in cutting, how's it literally not the opposite and the Fed is looking for an excuse not to cut?
The Fed is owned by the (big) banks. Sudden rate hikes throw their balance sheets off kilter but sustained higher rates, which they charge but don't pay, are gravy. Powell will keep my credit card at 33% or higher until the end of his term, barring an act of Congress or a crash they're willing to see.
Set of inflation has gone up 25% in the last 3 years divided by 3 I love being on an average 8.3% why would anybody think that having inflation especially even that high is good for the economy how about your target be zero and the ceiling be one and the floor be negative 1. I'm pretty sure people would not mind 2 to 3% deflation to make up for the 8% inflation for the past 3 years. That's my opinion I am a consumer so why don't they listen if they don't listen then they're not listening to anybody but the politicians and the markets which makes me want to give them the finger
The fed is owned by member banks, they don't care what the public wants or needs. As Alex said the 2% inflation number is made up number.. They know, and hide with all their lies, and games how high inflation has gone up these past a few years. Now we have to suffer to bring it back it back to their made up number, We are just wage slaves. Now to get inflation down, we have to have job cuts for them. Their games of enrichment will just put more people on the streets. They(bankers/politicians/lobbyist/1%) created this mess, and we are the ones who always suffer. How much greed is enough for these member bankers? It's a sick system they have created for their enrichment.
LEST GO!.
Please help me understand the difference between inflation and growth. Narrative seems to pro growth and anti inflation. Most of what I can understand suggests there can not be growth without inflation. Does either add true value? Or, is all value added by way of Labor, including problem solving?
These are normal interest rates. Not high at all.
You should bring in Stephanie pomboy to balance out the salty/surly of axel
Aa long as no Art Laffer
Ding. Ka-ching.
Adam even learning something new everyday - Hehe. His face when he talked about the press conferences being new
That's b/c I recall the press always saying they couldn't make sense of Alan Greenspan. So I know he did *some* press appearances
In other words, we should extend the gag rule to 6 months.😊😊
Quite depressing really.
Powell does have an easing bias and can't wait to lower rates back to 2% or even less. The Zero Interest Rate Policy is what got us into this horrible mess in the first place.
They need to raise them.
Axel mentioned "the demise of China". I really struggle with that because there is a significant demographic decline at work in China and will play out over the next decade or so. Maybe I'm just talking longer term than this discussion was.
Inflation is here to stay until credit markets seize….the question is when?
The FED has 8 trillion dollars popping up the stock market. The FED started to taper off 80 billion dollars a month. Now they changed the tapering off to 25 billion dollars a month. I don't know how this is all going to wind up but I don't think it's going to be too good.
We are actually in normalized rates maybe quarter-point higher than we need to be but these are normal rates I don't see what the problem is. We have lived off of zurp for so long now we're spoiled on it now we have to pay for money
Love that little dig Axle made..."Labor Day, the day we celebrate communism".
...Labor Day... the day employers are forced by government to pay workers to take the day off. I always thought Labor Day should be an unpaid holiday so workers can feel what their employer feels. when you pay for something up front, the supplier doesn't deliver.it, and the government pats itself on the back.
Who Will Tell the Country 1987. And thought bad back then
Fiscal and monetary policy since the GFC have blinded people to the economic factors at work in 1987. If fiscal policy continues the way it has of late, why should they be concerned if they get bailed out at the first sign of trouble?
Man, I wouldn't want to be Trump. He's walking into a well-crafted financial disaster come January 20th.
Pretty sure he misspoke about exchange rates and trade deficits. Trade deficits depreciate the currency while higher rates appreciate the currency. Edit that part out of the video.
What's going on guys?? There will be not Fed rate cuts this year????I think that gold rally will be rising in the long term¡¡
Too bad I am dollar short and day late.
Fed should target MINUS 2%, NOT plus 2%. Deflation is what is needed to set the record mismanagement straight. I’ve lost all respect for the fed. Once they have achieved minus 2% for the next consecutive years for at least 10 years, then I would consider reversing my opinion of them.
Does the Fed and Treasury need higher inflation to inflate the debt away like the government did after World War 2
Let's take the L out of the BLS. 😂😂😂
The lifeline to our economy, oil is going up again. This will also feed inflation.
The rise in inflation is caused by a decrease in demand for the US dollar. At the same time, the US is facing difficulties in selling its bonds, leading to an increase in yields. A significant portion of short-term bonds, which are primarily owned by foreign governments, are nearing maturity. If these governments don't reinvest in these bonds, the US will have to sell them to private investors, who will demand higher yields. This, in turn, will perpetuate a vicious cycle of increasing yields.
AI should replace the FED!!!!
Not complicated funny money = high inflation it's historical
The value add is seeing how the market would react to 3 rate cuts and he got his answer.
Markets to crash in early 2025 😢
As long as the Fed has trillions of dollars in stimulus out there and the federal government runs huge deficits inflation will be sticky. At the new rate of QT in June, it will take 40 months to remove each trillion. To get their assets down to 1 trillion dollars (which will likely never happen), it would take approximately 260 months, or 21.7 years.
Are the IOUs actually worthless bonds with zero per cent interest traded by debt slaves who hallucinate they have value? Are IOUs only good for paying income taxes? What good are IOUs over honest historical gold and silver? IOUs lose 6% a year for 100 years. Gold and silver lose nothing over 100 years. Why save in IOUs when I was not paid and they still "owe" me.
US public debt was $400 Billion in 1971, now $35 TRILLION, or $35,000 billion or 87.5X more debt. Isn't that "inflation"? If money is debt isn't more debt "inflationary"?
I had to argue what Axel discusses in my finance degree on the argument that government intervention Al actually CONTRIBUTED to the 2008 mortgage crisis! Fun to hear it out from the experts. When I bring it up people think I'm a nut.
Try something new....
Kennedy 2024 🇺🇸
Unfortunately he has absolutely no chance unless both of the Old Fogies croak.😂😂😂
That's incorrect Sir
@@mikesmevog7146 What is he polling at right now?
The labor movement created the middle class in this country. This guy lost all credibility with me with this extreme right-wing bias.
I never felt that way why do you say that?
@user-jl8yy5ir7s it wasn't "our leaders" it was companies beholden to the investors, constantly, shortsightedly watching the bottom line and quarterly reports.
It was both our leaders and the corporations...
Need time stamps, had to fast forward through endless intro waffle.
terrible guest speaker!!! next!!
Watching this guy is the biggest waste of time he literally just says “no” to everything no matter what.