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Episode 44 – Fed Hikes Despite Cratering GDP Estimates
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Today (March 15), Janet Yellen and the Federal Reserve decided to raise the Federal funds rate target from 50 to 75 basis points to 75 to 100 basis points. The Fed decided to hike rates despite cratering quarter one GDP estimates. The Atlanta Fed’s estimates declined from over 3% less than two months ago to the most recent estimate of 0.9%. The estimate has fallen from 2.5% to 0.9% in a two week time span. However, Yellen could not ruin the overly optimistic consensus that had build up around this meeting. Despite claiming to be “data-dependent,” the Fed showed once again that it makes its decisions based on popular opinion and the stock market indices.
I also discuss the entitlement mentality and inter-generational wealth transfers. If we would like for our children’s and grandchildren’s generations to be better off than we are, we cannot continue to rob them to get what we want today.
Suggested Readings/Referenced Articles:
“Yellen explains second interest-rate hike in three months — live blog and video” – Marketwatch
“Startled Reporter Asks Why Yellen Hiked With GDP And Real Wages Sliding: Here Is The Response” – Zero Hedge
“Congressional Budget Office Cost Estimate – American Health Care Act” – Congressional Budget Office
“You Owe Me: Examining a Generation of Entitlement” by Kate Rourke – Inquiries Journal
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