The Fed Skips Another Period?

But are rate hikes still in the chamber…? [The Rude Awakening] September 20, 2023 [WEBSITE]( | [UNSUBSCRIBE]( The Fed Skips Another Period? - It looks like Jay Powell will stand pat today. - But it also seems like he’s not done hiking yet. - Will this “will-he/won’t-he” uncertainty hurt the market? [Shocking U.S. Map Exposes $1.2T Opportunity]( [James Altucher]( Exactly 2,935 miles away from Wall Street lies [the biggest profit opportunity]( of your lifetime. A little-known opportunity which is creating an average of $32.8 BILLION in new wealth EVERY SINGLE DAY… That’s $1.2 trillion per year… And if you act fast, you have the chance to get in on the action starting right away. [Click here now for details](. [Click Here To Learn More]( [Sean Ring] SEAN RING Good morning from Asti on another gray day. Autumn will officially be here on Saturday, but I think it’s arrived early. I don’t mind, as writing in the cold is much easier than in the heat. What I do mind is being wrong. I thought the Fed would hike today. In fact, I was sure Powell would go and then do one more before the end of the year. But it looks like I was wrong, and the Fed will hold today. This, even though the CPI has climbed year-on-year for three months. Let’s get straight into why Jay Powell will, in all likelihood, hold rates steady today. [Secret Gold Back currency RUINING Biden’s plans for a digital dollar?]( [Click here to learn more]( What you see here is a completely new form of money… As we speak, it's being used as an alternative currency across the U.S. minting in places like Utah, New Hampshire and Nevada… And since it’s made out of a thinly printed sheet of REAL gold... It may be the single best way to protect your wealth from Biden’s plan for a government controlled digital dollar. That’s why, we'd like to offer to send one to you today. But since there are a limited number, I need you to respond to [this message]( by Wednesday at midnight. [Watch this short 2 minute message that explains everything here.]( [Click Here To Learn More]( Today is the Day The Federal Reserve is expected to hold interest rates at 5.25%-5.50% at its meeting on September 20-21, 2023. The Fed wants to assess the impact of its previous rate hikes and give the world economy time to adjust. I stress the “world” economy because the strong dollar is chewing up economies overseas, and their central banks would rather not hike right now. [chart] Seven Fed rate hikes in the last twelve months. Credit: [FRED]( The Fed has raised interest rates seven times in the last 12 months to combat inflation, which is coming off a 40-year high. However, the Fed has finally figured out that raising rates too quickly could lead to a recession. Here are three reasons why the Fed is likely to hold rates steady today: - Inflation isn’t “out of control” … yet. Inflation is still high but hasn’t jumped. The Consumer Price Index (CPI) rose 3.6% in August 2023 from a year ago, up from 3.2% in July and 3.0% in June. I thought this would make them hike. The CPI has risen for three months consecutively, but this seems not to bother the Fed. It bothers me, and I think they’re being too complacent here. [chart] - The economy is slowing. Economic growth has slowed in recent quarters, and some economists fear a recession may be on the horizon. The real US economy grew at an annual rate of 2.1% in the second quarter of 2023, down from 4.0% (year-on-year) in the first quarter. The Fed is unlikely to raise rates further if it believes that could push the economy into a recession. However, the Atlanta Fed has Q3 GDP growth coming in at 4.9%, so again, I disagree with Powell’s team. [chart] Credit: [The Atlanta Fed]( - The Fed wants to give the economy time to adjust. The Fed's rate hikes can take years to impact the economy fully. Raising interest rates too quickly can lead to a recession, as businesses are less likely to invest, and consumers are less likely to spend. The Fed wants to give the economy time to adjust to the rate hikes it has implemented before raising rates further. This certainly applies to small businesses that couldn’t swap out their interest rate risk when rates were low. Here are some additional factors that the Fed may consider when making its decision: - The strength of the labor market: The US labor market remains strong, with unemployment near a 50-year low. This suggests that the economy can withstand further tightening in monetary policy. - The global economic outlook: The global economy faces several challenges, including rising inflation and the ongoing war in Ukraine. The Fed will weigh these risks when making its decision about interest rates. If the European Central Bank had to raise rates again to chase the Fed, it’d plunge the Euroland economy into a more significant recession than it already has. The Fed is likely to hold rates steady today as it assesses the impact of its previous rate hikes and gives the world economy time to adjust. It’s still important to note that the Fed's decision is uncertain - at least for the next few hours. The Fed may - may - decide to raise rates today if it believes that inflation is not moderating quickly enough… but that’s an extremely low probability play. What Jim Rickards Thinks Here’s what [Jim wrote yesterday]( We should make it clear that the Fed’s decision not to raise rates tomorrow is not the much anticipated “pause” in this rate hike cycle. A pause is understood as the end of the rate hikes. After the pause is reached, the Fed will sit tight for a prolonged period of time before cutting rates and starting a new rate cut cycle. That’s not what’s happening. Instead, this is another “skip” of the kind the Fed did at the June 14, 2023 meeting. A skip does not mean that the Fed is done hiking rates. It means they want to slow the tempo. So, instead of raising rates at every meeting, they can raise rates at every other meeting or any other tempo they choose. The Fed raised rates last May, they skipped a rate hike in June, they raised again in July, and now they’re going to skip again in September. The “every other meeting” tempo seems firmly in place. That means we can expect another 0.25% rate hike on November 1, 2023, the Fed’s next meeting after this one. It’s too soon to make that a firm forecast, but that’s the most likely outcome as of now. Later in his piece, Jim mentions the elephant in the room. Look at this chart of WTI: [chart] Don’t you think this will translate at the gas pump? Jim continues: This reveals a 21% increase in crude oil prices in the past two months. Of course, that run-up in oil prices is part of what’s driving the increase in CPI with one important caveat. Wholesale prices take time to work their way to the gas pump where consumers actually notice the increase. This means the September crude oil price increase has not made it to the gas pump yet, but it will. That’s a reason to expect the CPI will continue to rise as the September numbers are reported in October and beyond that. Gas at the pump has risen 5.5% in the past year from $3.68 per gallon for regular to $3.88 per gallon. That number means more to consumers than CPI, PPI, PCE and all of the other inflation measures the eggheads use. It will get worse. It’s an election year. If Jay Powell can’t connect those dots, it’s another epic fail by the Fed. Powell’s trying to finesse inflation and recession. He’s likely to end up causing both. Wrap Up In all likelihood, the Fed will hold today. But Powell may raise rates at the next Fed meeting. Powell’s playing with fire, and he’ll probably get burned. I don’t see Russia and Saudi Arabia rushing to increase production in their new BRICS partnership to give Joke Biden a hand. Jay Powell may regret not hiking before the real problems begin. All the best, [Sean Ring] Sean Ring Editor, Rude Awakening X (formerly Twitter): [@seaniechaos]( In Case You Missed It… “Anybody See My F-35?” [Sean Ring] SEAN RING Good morning from a cool gray Asti. A few days ago, I misplaced my phone. Pam, annoyed at me for the umpteenth time for losing my phone in our apartment, said, “I’d call it, but you never put your damn ringer on!” I sheepishly looked away. I hate it when she’s so coldly right. Of course, I always find it in the end. But it’s a needless waste of time, exacerbated by the fact that I can’t just ring it to find it. But last night, I felt better. Much better. Sometimes, the newsletter gods just throw me grapefruits. Seriously. I mean, on what other timeline could I check Zero Hedge and have it read, “[Military missing F-35]( But before I get into this episode, let’s revisit the F-35, the hole in the sky the USG continues to pour money into. Chronology of the F-35 I’ve written about this budgetary disaster before, but let’s review the timeline again. This way, you can see how long this saga has been going on… and how much it’s cost. - 2001: The Joint Strike Fighter (JSF) program is launched to develop a new fifth-generation fighter jet for the US Air Force, Navy, and Marine Corps, as well as for allied nations. - 2002: Lockheed Martin is awarded the JSF contract. - 2006: The first F-35 prototype makes its maiden flight. - 2007: The F-35 program begins to experience significant cost overruns and developmental delays. - 2011: The F-35 program undergoes a major restructuring to reduce costs and accelerate development. - 2012: The first F-35 is delivered to the US Air Force. - 2013: The F-35 begins initial operational testing and evaluation (IOT&E). - 2014: The US Government Accountability Office (GAO) criticizes the F-35 program in a report that finds it’s still facing significant challenges and is unlikely to meet its cost and schedule goals. - 2015: The F-35 program is delayed another year, with the first full-rate production aircraft now scheduled for delivery in 2019. - 2016: The F-35 program is again delayed, with the first full-rate production aircraft now scheduled for delivery in 2021. - 2017: The F-35 program is yet again delayed, with the first full-rate production aircraft now scheduled for delivery in 2023. - 2018: The Pentagon criticized the F-35 program in a report that finds it still faces significant problems and is unlikely to meet its cost and schedule goals. - 2019: The first full-rate production F-35 is delivered to the US Air Force. - 2020: The GAO criticizes the F-35 program in a second report that finds it still faces significant problems and is unlikely to meet its cost and schedule goals. - 2021: The F-35 program is further delayed, with the full-rate production schedule now pushed back by two years. - 2022: - Several problems, including supply chain issues, engine problems, and software glitches, plague the F-35 program. - In February 2022, the Pentagon temporarily paused fighter deliveries because it discovered a Chinese-made part was used in production. - In August 2022, deliveries were paused again after an F-35 crashed in Texas. - In December 2022, the GAO released yet another report that found that the F-35 program still needs to improve and is unlikely to meet its cost and schedule goals. - 2023: - The F-35 program continues to be plagued by problems, including those same supply chain issues, engine problems, and software glitches. - In addition to the cost and schedule problems, the F-35 program has also been plagued by a few technical issues. These problems include: - Issues with the stealth coating - Problems with sustained supersonic flight - Issues with the helmet-mounted display - Excessive vibration from the cannon - Vulnerability to being hit by lightning The F-35 program has also been criticized for its lack of spare parts and high maintenance costs. Despite its numerous problems, the F-35 is allegedly the most advanced fighter jet in the world. It is also the most expensive fighter jet ever built, with a total program cost of over $1.5 trillion. The US military expects the F-35 to remain in service for several decades. (I don’t share their optimism.) However, the program's many problems have led to calls for its cancellation or downsizing. I think a cancellation is much more likely. But to be honest, I’m not sure the Pentagon accountants have ever heard of “sunk costs.” [New “WiFi Crypto” Token is Going NUTS!]( Only a handful of crypto investors know about this… But there’s a tiny, affordable device… That’s paid investors real crypto – every day, with zero work… Just for having a working WiFi connection! It sounds crazy, but it’s true… And [this 3:28 video]( explains everything. [Click here to view it NOW](. [Click Here To Learn More]( What Happened This Time? According to [Zero Hedge]( On Sunday afternoon, Joint Base Charleston, an air base in North Charleston, was working with Marine Corps Air Station Beaufort to "locate an F-35 that was involved in a mishap". The pilot ejected safely from F-35B Lightning II, but there were no immediate crash reports. The fact that the $140 million stealth fighter disappeared without any reports of a crash means it might have gone down in a sparsely populated area. [The Drive]( pointed out, "The DoD is saying the F-35B was put on autopilot prior to the ejection." Military expert and former British military officer Frank Ledwidge told [Newsweek]( the F-35 "could likely travel hundreds of miles without its pilot." "Historically, an aircraft without a pilot can fly a long way on autopilot," added Frederik Mertens, a military analyst with the Hague Center for Security Studies. [The Washington Post]( quoted Jeremy Huggins, a spokesman at Joint Base Charleston, who said the F-35's transponder was not working "for some reason that we haven't yet determined." Thank heavens, my iPhone doesn’t have wings! I’d never find it… At least the government wasn’t shy about asking for help: [TeamCharlseton tweet] Credit: [@TeamCharleston]( But the funnies just kept coming: [thebabylonbee tweet] Credit: [@The BabylonBee]( [ramblerants tweet] Credit: [@ramble_rants]( [thebabylonbees] Credit: [@The BabylonBee]( Wrap-Up If you didn’t laugh, you’d cry. The last time I wrote about the F-35, we learned [it can’t fly near lightning](. Now, it seems like it can fly off a long way without its pilot… and any way to find out where it went. These are your tax dollars at work. Maybe it’s time for the Pentagon to put them to better use. Have a great day! All the best, [Sean Ring] Sean Ring Editor, Rude Awakening X (formerly Twitter): [@seaniechaos]( [Paradigm]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2023 Paradigm Press, LLC. 808 Saint Paul Street, Baltimore MD 21202. By submitting your email address, you consent to Paradigm Press, LLC. delivering daily email issues and advertisements. To end your Rude Awakening e-mail subscription and associated external offers sent from Rude Awakening, feel free to [click here.]( Please note: the mailbox associated with this email address is not monitored, so do not reply to this message. We welcome comments or suggestions at feedback@rudeawakening.info. This address is for feedback only. 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