To truly crush inflation, Lindsey Piegza, chief economist at securities firm Stifel, is warning that the Fed may need to raise rates to 8 or 9%. “The recent improvement in inflation pressures turning over from peak levels has seemingly blinded many investors to the need for the Fed to aggressively continue along a pathway to higher rates,” she said. In other news, gold prices have slowed slightly, but experts believe they will soon rise again.
The Street/Dan Weil
Fed May Lift Interest Rates to 8%-9%, Economist Says
The big question raging through financial markets is how much more the Federal Reserve will raise interest rates.
Since it began its rate-hike campaign in March, the Fed has lifted the federal funds rate by 375 basis points (3.75 percentage points), to a range of 3.75% to 4%. In September, Fed officials predicted that the rate will peak at about 4.6% next year.
But in November, Fed Chairman Jerome Powell said the Fed may have to go further than expectations. And now experts, including interest-rate traders, have coalesced around a forecast of 5%.
But St. Louis Fed President James Bullard said last week that the Fed may have to push rates beyond that.
You can read the full story, here.
Kitco News/Jonathan Da Silva
Gold slowed – but likely higher to go
So far, so good for those aboard the gold train. As we have noted many times in the past, traders are prone to taking profit prior to obvious resistance areas; that phenomenon seems to have transpired again as the gold price turned around just $10, shy of the $1,800 mark.
Price is likely exhaling before a true test of the $1,800-10 level, in this trader’s opinion. At worst, bulls wasn’t the yellow rectangle to hold up as support; its lower boundary is $1,710. At best? Price rips through $1,810 on the way to $1,850 in a hurry. Below is an update of the familiar weekly gold chart.
You can keep reading, here.
Fortune via Yahoo Finance/Will Daniel
Wharton Professor Jeremy Siegel says stocks will soar 20% next year as inflation fades—but legendary investor Bill Ackman says not so fast
In boardrooms at Fortune 500 companies, at swanky Wall Street bars, and in the halls of business schools across the country, there’s been a consistent debate over “what’s next?” for U.S. inflation over the past year.
In recent months, a growing chorus of economists and business leaders have made the case that the scourge of sky-high consumer prices is coming to an end. But a separate group of similarly seasoned economic minds believes that history shows inflation won’t be so easily tamed.
Arguments made by Wharton Professor Jeremy Siegel and the billionaire hedge fund manager Bill Ackman over the past week exemplify these opposing ideas.
Continue reading, here.