Page 9 - TURKRptMar22

In December, the Fed governors expected the delivery of three rate hikes in 2022 that would bring the policy rate up to 0.75-1.00% from the current 0.00-0.25%.
On March 16, the Fed’s open market committee will announce the results of its next meeting along with updated projections by the governors.
A 50bp rate hike was already priced in before February 24, when Russia launched an invasion campaign in Ukraine. As of March 5, bets turned to 25bp.
On March 2-3, Fed chair Jerome Powell raised concerns over “Ukraine-related risks” but he confirmed that the policy rate would be hiked by 25bp at the March meeting.
Annual CPI inflation in the US rose to 7.5% in January from 7% at end–2021 and 1.4% in January 2021.
It is unknown how inflation trends will be reversed without a recession in the real economy and a collapse in the financial markets.
Another war would totally shelve monetary tightening plans.
Note that more than $2 trillion have already been printed. It presently resides on the Fed’s balance sheet under the Treasury General Account (TGA) and the Reverse Repo (RRP) account. When the Fed zeroes its net money printing volume, this money will continue flowing into the system.
The Biden administration remains weak when it comes to managing a fiscal boom. Coronavirus (COVID-19), not Joe Biden, won against Donald Trump in 2020.
November 4: Midterm elections in the US. At the moment, Biden is expected to lose his majority in Congress (It is questionable whether he has ever had one but Democrat seats in theory make a majority at the moment). Without an external impulse such as COVID-19, the US is getting ready for a more powerful populist president (not Trump but someone else) in 2024.
The finance industry’s plan was to pump money via fiscal policy instead of monetary policy.
However, the Biden administration is not promising to achieve it now.
Meanwhile, inflation, which was previously ‘stored’ in the form of financial asset price bubbles during the longer-than-a-decade money printing mania, is also booming now.
Via fiscal or monetary policy, the money printing must proceed; no-one can contemplate stopping it until inflation is totally out of control.
If the money printing is really stopped, the world will enter a serious recession (no need to mention bursting asset bubbles).
Or, wars will solve all the problems that the policymakers face. Wars support economies and manufacture consent among the toiling masses against all troubles (There is war now. Prices are booming and you lost your job because of it. We have to stand still now until the war ends).
9 TURKEY Country Report March 2022 www.intellinews.com