minneapolis fed neel kashkari doge

First, the recession that isn’t. According to the technical (or widely accepted) definition, the US economy entered recession last week after two consecutive quarters of negative GDP growth.

There’s going to be a load of tedious debate about this (probably lasting months). We can leave it to the academics and politicians to argue about the correct definition. The data provides ammo for pretty much every argument you can make.

Academia aside, the US economy looks like it did just fine in the first half of the year. Employment was still growing, and a key measure of overall consumer demand in the economy (final sales to domestic purchasers) rose by 2% in Q2.

At the same time wages are increasing by much higher amounts than they have previously. The US employment cost index (ECI) increased by 5.7% compared to Q2 2021.

Wages continue to grow. So far, the labor market is very, very strong.”

Don’t fight the Fed

“Don’t fight the Fed” is a timeless cliché passed down from older generations of traders and investors to the new breed. Perhaps that message has been lost after a decade plus of markets being spoiled by a central bank that’s quickly responded to slowdowns by cutting interest rates.

It’s a fascinating dynamic. Sir John Templeton famously said that the four most dangerous words in the English language are “it’s different this time”.

Market sentiment:

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Give Oil – Brent a try

Even accepted wisdom needs context though.

OAN Newsroom UPDATED 2:20 PM PT – Monday, August 1, 2022

FILE PHOTO: Minneapolis Federal Reserve Bank President Neel Kashkari poses during an interview with Reuters in his office at the bank’s headquarters in Minneapolis, Minnesota, U.S., January 10, 2020. REUTERS/ Ann Saphir

President of the Federal Reserve Bank of Minneapolis Neel Kashkari said Democrats are responsible for economic problems facing the US.
In an interview Sunday, Kashkari pointed out that Biden’s officials falsely denied that inflation would get out of hand and now they are trying to change the definition of a recession.

“People don’t wait to hear from the media that they’re in a recession,” said Kashkari. “Most peoples pay checks are not going as far as it used to and that is true.

Minneapolis fed neel kashkari dogeat

One big driver could be energy… Brent crude price chart

Almost everyone notices inflation in their household energy bills and when they’re filling up the car, and despite all of the recession chatter, oil prices remain surprisingly resilient.

If the energy complex (oil, natural gas, and refined fuels such as gasoline, diesel and jet fuel) strengthen, this could cause inflation expectations to push higher and prompt more hikes from central banks.

If that happens, there’s not much margin for error in the tech-heavy Nasdaq 100 (US100). The index is down 22% from all-time-highs…

And up by 95% from the March 2020 lows.
Pre-Covid, the Nasdaq traded at a high of 9,755. Two and a half years later, it’s trading just shy of 13,000. If rate hike expectations shift higher again, it’s not hard to imagine another drop in US tech stocks.

Minneapolis fed neel kashkari dogeza

Minneapolis Federal Reserve President and FOMC member Neel Kashkari said on Wednesday that the Fed is going to do what is needed to bring “thing” (the economy) back into balance. Some of the inflation should fade on its own as stimulus fades and people switch to buying services, he added.

Kashkari said that the Fed can soften demand by raising rates and tightening financial conditions, but that won’t address supply-side issues.

He also noted that his own recent experience with Covid had suggested to him that it will be a while until we can be comfortable living with the virus, before supply chains come back and before workers on the side-line can come back to work.

Market Reaction

There has not been any reaction to Kashkari’s latest remarks, which haven’t added anything new.

Minneapolis fed neel kashkari dogecoin

Emphasising the point further he added:

“The committee is united in our determination to get inflation back down to 2 percent, and I think we’re going to continue to do what we need to do until we are convinced that inflation is well on its way back down to 2 percent — and we are a long way away from that.”

And just in case anyone at the back wasn’t paying attention, Kashkari declared that the bar to clear for lower rates is “very, very high”

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The Minneapolis Fed Chief appeared on ‘Face The Nation’ on Sunday night to reiterate his position:

“Whether we are technically in a recession or not doesn’t change my analysis, I’m focused on the inflation data. I’m focused on wage data. And so far, inflation continues to surprise us to the upside.

Dogecoin (DOGE) la semana pasada al llamar ponzi a la moneda meme y reforzar su retórica contra las criptomonedas.

Los comentarios de Kashkari fueron en respuesta a una encuesta de LinkedIn realizada por Paul Grewal, el director legal y secretario corporativo de Coinbase, preguntando a sus conexiones sobre la pronunciación correcta de Doge.

“La pronunciación correcta es pon-zi”, bromeó Kashkari.

Esta no es la primera vez que Kashkari apunta a las criptomonedas. En febrero de 2020, dijo que los activos digitales como Bitcoin (BTC) carecían de los inquilinos básicos de una moneda estable y elogió a la Comisión de Bolsa y Valores por “tomar medidas enérgicas” sobre las ofertas iniciales de monedas.

Kashkari no es miembro del Comité de Mercado Abierto de la Reserva Federal de este año, el grupo responsable de establecer la política monetaria de Estados Unidos.

Within the next five years, inflation will return to the 2-3% range

Which is all well and good as long as they don’t change their minds.

Ahead of the June meeting, the preliminary results of the University of Michigan survey showed longer term inflation expectations accelerating to 3.3%. This is partly what prompted the Federal Reserve to hike by a larger than expected 75bps.

The final reading was later revised down to 3.1%, while the latest survey saw expectations drop to 2.8%.

The Fed has already shown their hand once. If longer-term inflation expectations begin to tick higher again, it would be no surprise to see them increase the aggression and drive those expectations back down with even higher interest rates.

They’re going to think this is a recession, they’re going to think this is a bad economy and they’re hold the party in power accountable. This administration I think has consistently played politics of the economy badly.”

“We would love it if we can transition to a sustainable economy without tipping the economy into recession.
There’s not a great record of doing that.”

Neel Kashkari, Minneapolis Fed Bank president, said we are “a long way away” from an economy that is back at 2% inflation. pic.twitter.com/F8Mb7Bm6Ke

— Face The Nation (@FaceTheNation) August 1, 2022

The central banker said administration officials should not have done that and they should have admitted responsibility instead.

La oficina de la Fed en Minneapolis servirá como miembro suplente del FOMC en 2022 antes de regresar al comité como miembro con derecho a voto en 2023.

Si bien Kashkari no votará sobre política monetaria este año, se opone a cualquier medida de alza de tipos antes de 2023. El resumen del diagrama de puntos de las proyecciones de tasas de la Fed publicado la semana pasada indicó que los responsables de la formulación de políticas están buscando reanudar las subidas de tasas para fines de 2023, antes de lo esperado.

Conectado:El precio de Bitcoin apunta a $ 7,000 después de que la Fed dice que tiene “efectivo infinito”.

El pronóstico revisado puede haber contribuido al fuerte aumento del dólar estadounidense a expensas de las acciones, los productos básicos e incluso las criptomonedas.

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