Fed is going hard on inflation! Will it backfire? (Ep. 615)

What is the Jerome Powell's strategy against inflation, will the Fed raise rates of interest too quickly, is the economy at danger, and things to watch out for.

Fed's summary of financial projections:

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Fed is going hard on inflation! Will it backfire? (Ep. 615)

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32 Comments

  1. Crash and recession is inevitable. Inflation rages and everyone sufferers . Fed raises rates crashes economy and people suffer. Job loss ,inability to afford loans. Two years to get into this mess. 2 years to get out. Just in time for new president .

    Crush economy also with high oil prices. Seems to be a huge problem. We need oil solution.

    Inflation is 30 or 40 %. Gravy bones went from 10 to 14$.

    1. @Todor Kolev Just because other countries do it, doesn’t make it a good idea. Subsidies are just protectionism. How about we lower tariffs and corporate taxes, to encourage foreign companies to come here?

    2. @daryl foster China in the 50’s couldn’t produce even basic steel.
      They wanted to gain some sort of technological and economical foothold.
      Their strategy wasn’t to allow some businesses to become rich and hopefully trickle down to the masses – they don’t even have an economical model that is compatible with such dynamics.

      China’s strategy was to steal western technology and slowly creep up into a leading position.

      As for what you said: China wasn’t ever going to come here. Not only that a tarrff waiver would have been puddle nuts compared to the labour costs difference, but, again, their strategy was to GET the factory and the technology.

      I can refer you to many Chinese industries that were ridiculously hopeless but have quickly become competitive.

      The lack of innovation in Chinese development AND the speed at which they caught up clearly indicates that they “took a short cut”… Not to mention China’s track record for intellectual property!

      Now, it’s them who know how to make stuff, and we don’t (except VLSI).

      I am generally very pro-capitalism and even consider myself a libertarian.

      but STRATEGIC industries need special government attention.

      You don’t float an IPO for the US Army to buy more tanks, right?

      Food production, cutting edge technology, precious materials, etc – these are all industries that you don’t want to tune for 100% profit.

    3. @daryl foster wow, so refreshing to hear another perspective not laced with a once sided political accusation. The truth is this was 22 years in the making, ever since Clinton was out and Bush came in. Since then its been spend spend spend + lower taxes for the rich richer richest.

    4. @Monterino Overson don’t forget the massive tax cuts he gave that stimulated demand in a supply short market…

  2. Dave you covered everything except the fact that retail outlets (Target, Walmart, etc) have excess orders and goods so they’ll have to get rid of them soon. How does that fit into the scenario?

    1. Lots of sales to clear inventory. That should help a little on the inflation front, but we still need increased energy production, an end to the war, and then there’s the wild card of the insane zero Covid that is wreaking havoc on supply chains.

  3. Thanks for your work Dave, Your video helps me a lot on my investing and learning English at the same time^^

  4. Thanks for keeping it short and not turning an 8 minute video into a 20 minute video for no reason

  5. It doesn’t matter what they predict ! They are ALWAYS SUPER WRONG!
    Its much worse ! Takes all of 2023 / 24 to stabilize !

  6. The supply chain shortages will continue until 2024. Was about to buy a Honda motorcycle and a friend needs a KTM display for his bike. Honda will deliver in 2023 and KTM does not know when they will get spare displays, they only know that they won’t in this year. Same for E-Bikes, you wait around 6 months to one year for an E-Bike.

  7. Yes! See Tom Nash, he is totally right! Fed too late. Stagflation to come, destroying markets. High unemployment ahead! That will stop spending. Just because the gouvernement can’t pay the interest if it goes too high.

  8. My uneducated opinion: In theory, what the fed is doing makes sense and should make a difference. In reality, things are still going to be jacked up with the general population trying to digest the fast-moving markets that are unpredictable with uncertain circumstances trying to make sense of it. With us reacting to each knee jerk reaction of the broader market. Well… trying to make sense of it all the meanwhile lol. Wish I had “too much income” to know what to do with and continue to DCA in the market lol. I will see how purchasing a second home will treat me as I do some liquidation and not trying to pull out of escrow. Yeesh. Love Daves Videos.

    -Uneducated guy who goes to university of YouTube and reads books / talks to people and listens to people much smarter than me.

  9. Just make me FED chairman, I’ll do a better job. I’ll keep the key interest rate at a steady predictable 1% for my entire term and let markets work themselves out. I’ll spend my entire office time fishing, walking and cycling in the Pyrenees, the Himalayan mountains and the alps. There will be dissenters, there always are. But 10-15 years later I’ll be called a genius and the greatest FED chair ever for having provided stability, a solid framework and a steadfast vision.

  10. Inflation begins when dollars are printed. Printed dollars are a data input to the CPI. The CPI print is the feedback loop from printed dollars. Keynesians have been trying for decades to print dollars to create inflation-used as a signal to show the stimulus is working. Then before inflation gets entrenched, deflate by destroying printed dollars. The problem here is the Fed didn’t remove the dollars it printed to stimulate. So the higher prices are here to stay for a while. The dollar strength is transitory. You will see a weak dollar once those bonds the fed has on its balance sheet become difficult to sell as higher yielding assets will be more desirable to investors.

    1. I lost everything in the last recession and learned from it. I made sure to live below my means and save every possible dollar. I also invested correctly and diversely instead of buying material things, restaurant meals, and expensive vacations. I’ve been waiting all these years for the next recession so I can capitalize on irresponsible debt. If this video is correct, it will be a very exciting investment shopping spree for me

    2. Consider the economy as one huge engine that produces the life styles that humans live & prosper & create a healthy financially secure future for their families . Corruption, manipulation , creation of unhealthy political policy & diplomatic environments is a recipe for engine failure. People are equally losing money in the financial market in the midst of all these.

    3. @Ella RobertInflation is gradually going to become part of us and due to that fact any money you keep in cash or in a low-interest account declines in value each year. Investing is the only way to make your money grow and unless you have an exceptionally high income, investing is the only way most people will ever have enough money to retire. Personally I hired ‘’Stephanie Priscilla Bonillo’’ a financial advisor who I copy her trades and with a good 7% in ROI monthly.

    4. @Marian ParkerI wish people can see this from this perspective sooner than later. Things are really going south and everybody is acting cool. How can i reach this advisor?

    5. @Marco PoloLook her up on the web if you need guidance, People do not want to wake up to the reality.

  11. First of all – I really do love your Videos. It is very good information and makes feelings calm down due to the rational input. Also I sense a warm hearted human being you are and I am very grateful, that you share all this with the world. I am very curious – how did you manage to look directly in the camera and how does this feel. What was the process for you to do that and do you have any advice for starters? I know this is a very personal question, but I would love to hear directly from you. Greetings from Vienna, Austria.

  12. These coal/oil/gas supply shocks now will give a massive boost to nations going harder on a low carbon future.
    One great benefit of wind/solar/hydro/geothermal/tidal/ocean current power generation is that they are not subject to supply chain disruption and will dramatically lower energy costs in all advanced economies.
    No immediate help for today’s cost pressures here, but within 5 years we will see a huge economic advantage to those that have access to cheap energy.

  13. The fed has no control over poor supply chains, the war in Ukraine, or virus lock downs in China and else where..
    Raising interest rates in the US and around the world and the run off of the balance sheet will reduce demand.
    Those other issues will need to sort themselves out over time.

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