Jim Rickards joined Stephen Guilfoyle on The Street to discuss his latest take on the numbers that will move the Fed in through its decision making process. During the conversation Jim Rickards and Mr. Guilfoyle, also known as ‘Sarge’ on Wall Street, cover how the Federal Reserve will continue to push rates higher and potentially trigger a recession.
To begin the discussion Sarge prompted Rickards’ on his read regarding the trajectory of monetary policy in the United States. Rickards noted, ‘I see the Federal Reserve raising rates in June – the market is getting there, they’re not quite ready yet though. The Fed is on track to raise rates four times a year until 2019 in order to get the Federal funds rate at 3.25%. The expectation is rate hikes in March, June, September, December in a sequence until 2019.’
‘There are only three reasons that the Fed might his a ‘pause button.’ There are only three reasons they would do so. First, if job creation falls below 75 thousand per month, which is a pretty low hurdle. Second, if the stock market fell out of bed and I don’t mean 5%. If the Dow was to fall more than 2000% that would cause the Fed to pause. The third thing would be disinflation. Inflation is currently moving toward the Fed’s goal but if it started to move the over way [you could see the central bank take a pause]. If you don’t see those things then expect the Fed to raise four times a year.’
This post was published at Wall Street Examiner on April 10, 2017.
Follow on Twitter
Recent Comments