On Sunday we gave you a heads-up about a Fed funds rate increase coming today. It has arrived, as Forbes reports:
At the conclusion of its two-day policy meeting, the Federal Open Markets Committee said Wednesday afternoon it voted unanimously to raise the federal funds rate (the rate at which commercial banks borrow and lend reserves) by 75 basis points, for a second time in a row, to a target range of 2.25% to 2.5%.
You should interpret this action as the Federal Reserve Bank being quite concerned to slow the current high rate of inflation. Let's hope they can damp the inflation without causing a recession, but don't count on that difficult-to-achieve sequence of events.
Another source reports bank repos of recently purchased autos are on the rise, which tends to be a leading indicator of recession. You'll know it is serious when home prices begin to fall, hints of which may have already happened in some markets.
