Reply To: Federal Reserve Financial Stability Report Follows Three of the Four Largest Failures in U.S. History


So on liquidity…

More Wall Street forecasters say #Fed Likely to Consider 0.75-Percentage-Point Rate Rise This Week say WSJ
So far at 75bps rise
– Barclays and Jefferies on Friday,
– JPMorgan Chase and Goldman Sachs on Monday

Two consumer surveys have also shown households’ expectations of future inflation have increased in recent days. That data could alarm Fed officials because they believe such expectations can be self-fulfilling.

He also said in an interview last month that the Fed would be guided by the economic data to come. “What we need to see is clear and convincing evidence that inflation pressures are abating and inflation is coming down. And if we don’t see that, then we’ll have to consider moving more aggressively,” Mr. Powell said.

“It’s a one-two punch,” said Diane Swonk, chief economist at Grant Thornton. “They’ve got to go now with 75. The Fed is behind the curve, and they know it.”

Ms. Swonk said she expected officials to make such an argument at this week’s meeting. “The data now is not good. The data is saying they have to do more,” said Ms. Swonk. “We’re moving into a more inflation-prone world, and they know that, and if they don’t derail it now, this could be incredibly corrosive.”