Alternative Visions - Jobs Report, Fed Rate Hike & Midterm Elections

Dr. Rasmus dissects today’s October Jobs Report release and discusses the consequences, and future direction, of this past week’s latest Federal Reserve rate hike of 75 pts, the 4th in a row. Will there be another 75 in December? Why do investors consistently ‘bet’ that the Fed will ‘pivot’ and slow its rate hikes? Why has the Fed said it will now focus on its ‘terminal’ (highest) eventual rate? Why are banks and business economists predicting the Fed has to stop raising rates around 5% for its base rate? Dr. Rasmus reiterates his past prediction the Fed can’t raise rates above 5% without precipitating financial instability. Inflation will continue high through the winter after, abating a little at best, as the US economy slides into a deeper recession. The various supply and demand factors driving inflation are noted, as well as new factors entering the inflation equation like the collapse of US productivity and rising business unit labor costs. A prediction is made that the Democrats will lose both houses of Congress (The House by 5-10 seats and Senate by 1-2 Seats). US budget deficits will deteriorate further again in 2023 and the Republican controlled Congress will focus on Austerity policies, impacting mostly social programs.