Prices are skyrocketing. Inflation is costing the average American $275 more each month. Democrats in the House, the Senate, and the White House have ignored the issue month after month. NN: they have finally scratched their ass and are starting to figure out the inflation genie is out of the bottle. The problem is they still do not realize the collapse that is coming.
Raising rates will be appropriate soon – FOMC minutes
Breaking: FOMC minutes say: The minutes of the 25-26 January FOMC meeting, released on Wednesday, said that most participants suggested that a faster pace of increases in the target rate for the Federal Funds rate than in the post-2015 period would likely be warranted.
- Participants continued to stress that maintaining flexibility to implement appropriate policy adjustments on the basis of risk-management considerations should be a guiding principle.
- Participants continued to judge that the committee’s net asset purchases should be concluded soon.
- Many participants noted the influence on financial conditions of the committee’s recent communications and viewed these communications as helpful in shifting private-sector expectations regarding the policy outlook.
- Most participants preferred to continue to reduce the committee’s net asset purchases according to the schedule announced in December, thus bringing them to an end in early March.
- Participants emphasized that the appropriate path of policy would depend on economic and financial developments and their implications for the outlook and the risks around the outlook.
- Most participants noted that, if inflation does not move down as they expect, it would be appropriate for the committee to remove policy accommodation at a faster pace than they currently anticipate.
- Some participants commented on the risk that financial conditions might tighten unduly in response to a rapid removal of policy accommodation.
- Removal of policy accommodation in the current circumstances depended on the timing and pace of both increases in the target range of the Federal Funds rate and the reduction in the size of the Federal Reserve’s balance sheet.
- A couple of participants stated that they favored ending the committee’s net asset purchases sooner to send an even stronger signal that the committee was committed to bringing down inflation.
- A number of participants commented that conditions would likely warrant beginning to reduce the size of the balance sheet sometime later this year.
- Some participants commented on the risk that financial conditions might tighten unduly in response to a rapid removal of policy accommodation.
- A few participants remarked that this risk could be mitigated through clear and effective communication of the committee’s assessments of the economic outlook, the risks around the outlook, and the appropriate path for monetary policy.
- Participants anticipated that it would soon be appropriate to raise the target range for the Federal Funds rate.
- Many participants commented that sales of agency MBS or reinvesting some portion of principal payments received from agency MBS into treasury securities may be appropriate at some point in the future.
- Participants agreed that uncertainty regarding the path of inflation was elevated and that risks to inflation were weighted to the upside.
NATO Says Europe Security Crisis is ‘New Normal’: Ukraine Update
(Bloomberg) — High-level diplomacy continues in a bid to defuse the situation around Ukraine. U.S. President Joe Biden will talk with German Chancellor Olaf Scholz later Wednesday ahead of an emergency summit of European leaders on Ukraine the next day. Group of Seven foreign ministers will then meet in person in Munich on Saturday. High-level diplomacy continues in a bid to defuse the situation around Ukraine. U.S. President Joe Biden will talk with German Chancellor Olaf Scholz later Wednesday ahead of an emergency summit of European leaders on Ukraine the next day. Group of Seven foreign ministers will then meet in person in Munich on Saturday. Oil advanced and the ruble decline as western officials voiced reservations about Russian announcements that some of its forces are being drawn down. NATO Secretary General Jens Stoltenberg said there’s no proof of de-escalation and it appears Russia is continuing its military build-up, comments later endorsed by U.S. Secretary of State Antony Blinken. The Kremlin denied the claim. The Russian Defense Ministry said earlier Wednesday that more troops were returning to their bases after maneuvers ended in Crimea, which Russia annexed in 2014. Russia hasn’t yet announced pullbacks of large numbers of troops in the country’s southwest along the Ukrainian border and in Belarus, where exercises are scheduled to end Feb. 20. Officials in Moscow have dismissed U.S. warnings of a possible invasion of Ukraine as “hysteria” and propaganda. NATO’s Stoltenberg told reporters in Brussels that the situation in Ukraine shows that Europe is facing a long-term security crisis. “Moscow has made it clear that it is prepared to contest the fundamental principles that have underpinned our security for decades and to do so by using force,” Stoltenberg said. “I regret to say that this is the new normal in Europe.” NN: This is a dangerous game. Russia has huge currency reserves. And Oil approaching $100 means this is a self funding enterprise. The issues are NATO expansion and supplying advanced weapons systems to former Soviet Union states. And Putin is royally pissed off that he has not been granted a permit for his pipeline to Germany. I believe Europe wili cave in… in due course..
Satellite images show new Russian military activity near Ukraine
MOSCOW, Feb 15 (Reuters) – New commercial satellite images show a flurry of Russian military activity at several locations near Ukraine, the private U.S. company that released the pictures said, amid fears that Moscow may launch an attack on its ex-Soviet neighbour. Russia, which has repeatedly denied plans to invade, is holding large military exercises in ex-Soviet Belarus, part of a dramatic buildup of forces to the north, east and south of Ukraine. U.S.-based Maxar Technologies, which has been tracking the buildup of Russian forces for weeks, said on Tuesday that images taken on Sunday and Monday captured significant new activity in Belarus, annexed Crimea and western Russia.
Maxar pointed to the arrival of several large deployments of troops and attack helicopters as well new deployments of ground attack aircraft and fighter-bomber jets to forward locations. The images also captured the departure of multiple ground forces units from existing garrisons along with other combat units seen in convoy formation, Maxar said.
St. Louis Fed President Says Central Bank’s ‘Credibility Is On the Line’ as US Inflation Surges
Inflation continues to grip American wallets, according to a recent economic analysis from Moody’s Analytics, which shows inflation is likely costing the average U.S. household between $250 to $276 per month. Meanwhile, the U.S. Federal Reserve is expected to raise the benchmark interest rate in March and St. Louis Fed president James Bullard believes the Fed needs to “front-load” rate hikes.
St. Louis Fed President on Inflation: ‘People Are Unhappy, Consumer Confidence Is Declining’
Last week, the U.S. Labor Department published its Consumer Price Index (CPI) report which noted inflation jumped 7.5% higher than it was a year ago. Following the report, Moody’s Analytics notes that the average U.S. household is likely paying $250 to $276 a month due to the added inflation. As the days continue in 2022, the U.S. dollar’s purchasing power has decreased and the price of goods and services has increased. Moody’s senior economist Ryan Sweet explained that a lot of Americans are feeling the burden of inflationary pressures. “A lot of people are hurting because of high inflation,” Sweet said. “$250 a month—that’s a big burden. It really hammers home the point of ‘what is the cost of inflation?’” The chief executive officer and 12th president of the Federal Reserve Bank of St. Louis, James Bullard, made similar remarks on Monday. “The inflation that we’re seeing is very bad for low- and moderate-income households,” Bullard told CNBC
. “People are unhappy, consumer confidence is declining. This is not a good situation. We have to reassure people that we’re going to defend our inflation target and we’re going to get back to 2%.”
Bullard also spoke about the Labor Department’s January CPI report published last week. “My interpretation was not so much that report alone, but the last four reports taken in tandem have indicated that inflation is broadening and possibly accelerating in the U.S. economy,” Bullard stressed. During the CNBC “Squawk Box” interview, the president of the Federal Reserve Bank of St. Louis added:
I do think we need to front-load more of our planned removal of accommodation than we would have previously. We’ve been surprised by the upside on inflation. This is a lot of inflation. Our credibility is on the line here and we do have to react to the data. However, I do think we can do it in a way that’s organized and not disruptive to markets.
San Francisco Fed President: ‘Fed’s Abrupt and Aggressive Action Can Actually Have a Destabilizing Effect’
Equities markets have felt the sting of a souring U.S. economy as Nasdaq, NYSE, and the Dow Jones Industrial Average all closed in red territories on Monday. Data shows bond markets have also signaled that investors are concerned about the Fed’s decision. The president of the Federal Reserve Bank of San Francisco, Mary C. Daly, spoke about the Fed acting on inflation as well, but stressed to CBS’s “Face the Nation” that it needed to be a “measured [approach].” “I see that it is obvious that we need to pull some of the accommodation out of the economy,” Daly explained. “But history tells us with Fed policy that abrupt and aggressive action can actually have a destabilizing effect on the very growth and price stability we’re trying to achieve.” NN: This will end up in a financial crises… The stock, bond and real estate market will crash. The depression will last a decade. An the America we all grew up with and loved will be gone with the wind. What comes next for the masses will be hell on earth,,,,,
Russian forces leaving Crimea after completing drills
MOSCOW, Feb 16 (Reuters) – Russia’s defence ministry published video on Wednesday that it said showed a column of tanks and military vehicles leaving annexed Crimea across a railway bridge after drills, adding that some troops would also return to their permanent bases. Moscow announced a partial pullback of forces from near Ukraine on Tuesday. The move was met with scepticism, however, and U.S. President Joe Biden said that more than 150,000 Russian troops were still amassed near Ukraine’s borders. World powers are engaged in one of the deepest crises in East-West relations for decades, jostling over post-Cold War influence and energy supplies as Moscow wants to stop the former Soviet neighbour ever joining the NATO military alliance. On Wednesday morning, video footage showed what the defence ministry said were tanks, infantry fighting vehicles and self-propelled artillery units leaving the Crimean peninsula that Moscow seized from Kyiv in 2014. “Combat equipment and military personnel will be delivered by military trains to the units’ permanent deployment points,” the defence ministry said. “Upon arrival, the equipment will be serviced and prepared for carrying out the next phase of combat training.” The video, published by the RIA news agency, showed dozens of military vehicles crossing the bridge at night. A separate convoy of service vehicles drove across a different bridge, the TASS news agency cited the military as saying. NN: I can’t believe any one fell for the troop pull back game Putin is playing. Oil dropped close to $4.00 a barrel. Oil now is with in $2.00 of its high in this current manipulation. I still want to stand aside for now. Let the market have t run… we are very very very close to starting operations in oil
Russia pulls back some troops from Ukraine border
Some Russian troops near Ukraine’s border are returning to their bases after completing missions, but other large-scale drills remain ongoing, Russia’s defense ministry said on Tuesday. It’s a sign that Russian President Vladimir Putin may be willing to de-escalate the crisis, but the threat of war isn’t over yet, per the New York Times.
- The U.S. and other Western nations have evacuated most embassy staff from Kyiv due to concerns of an imminent Russian invasion.
- Tuesday’s announcement comes a day after state television showed Russian Foreign Minister Sergey Lavrov telling Putin that he believed diplomatic “possibilities are far from exhausted,” to which the president replied “good.” “The units of the Southern and Western military districts, having completed their tasks, have already begun loading onto rail and road transport and will begin moving to their military garrisons today,” spokesperson Igor Konashenkov said in a statement.
“A number of combat training exercises, including drills, have been conducted as planned,” Konashenkov added. “The Russian Armed Forces are continuing a range of large-scale exercises for operational training of troops and forces. Practically all military districts, fleets and the Airborne Troops are taking part.” Russian defense ministry spokesperson Igor Konashenkov “The path for diplomacy remains available if Russia chooses to engage constructively,” White House principal deputy press secretary Karine Jean-Pierre said at a briefing on Monday. “However, we are clear-eyed about the prospects of that, given the steps Russia is taking on the ground in plain sight.”
Ukrainian President Volodymyr Zelensky said during a news conference on Monday that while he wanted his country to join NATO “for our security,” he conceded this could remain “a dream,” according to the NYT.
NN: We know who would blink first….. Now a little more pressure and Germany will open up the Nord Stream II pipeline. Game Set Match Russia.
Canadian Oil Exports To U.S. At Record Level
Canadian oil producers are exporting crude to the U.S. at record rates, Reuters has reported, adding that demand for the heavy, sour crude that Canada is producing is surging. What’s more, a growing amount of this crude is not staying at Gulf Coast refineries but is being exported to international markets. Kpler data cited by Reuters shows that the rate of Canadian heavy crude exports from the Gulf Coast topped 180,000 bpd last year, up from about 70,000 bpd in 2019 and 2020. In December, export rates from the Gulf Coast reached 300,000 bpd. Most of this crude is going to India, China, and South Korea, replacing lost Venezuelan barrels. Canada’s oil sands production is also at record levels of 3.5 million bpd, according to the Reuters report. According to a Capital Economics expert, however, Canada’s oil production is suffering from pipeline constraints. “The oil sector is not the driver of GDP growth that it once was,” Stephen Brown said in a note quoted by Bloomberg this week. “Due to pipeline capacity constraints, there is little supply response to rising prices, with oil production still stuck near 2018 levels. With export capacity out of their hands, producers have been using their income to pay down debt rather than invest.” “As there is little scope for an immediate supply response and it takes time for higher oil export earnings to feed through to the rest of the economy, for example, in the form of higher wages in the oil patch, there is a risk that higher oil prices initially have a modest negative impact on Canadian economic activity, by eating into consumers’ real spending power,” the economist also said. The Canadian oil industry has been hard hit by canceled pipeline projects, but, as Reuters reports, Enbridge managed to expand the capacity of the Line 3 pipeline twofold last year. At the same time, the Capline Pipeline, which normally transports crude from Louisiana to Illinois, reversed flows last year to move more Canadian crude to the Gulf. NN: Remember when Biden stopped as many US Canadian pipelines. But as drugs have proven where their is demand suppliers will find a way… And its the Choo Choo train… I remember we use to laugh when Russia transported crude by rail…. no so any more. Supplies are coming in by rail from Canada at 90$ oi, l its becomes a hugh magnet…..
UK’s Truss fears Russia will not stop at Ukraine
Russia’s top diplomat on Tuesday mocked Western intelligence for naming the date of a Russian invasion as Moscow announced a partial drawdown of troops, reports our Moscow correspondent Nataliya Vasilyeva.
“February 15, 2022, will go down in history as the day when Western war propaganda failed,” Maria Zakharova, a spokesperson for the Russian foreign ministry said on social media on Tuesday. “They were humiliated and defeated without a single shot.” Ms Zakharova’s comments came out around the time when Russia’s defence ministry said it was pulling back some of its troops from near Ukraine that allegedly were there for military drills. Russia has built up an unprecedented assault force near Ukraine in recent months but the Kremlin has deflected calls to de-escalate, insisting that Russia troops were free whatever they washed to do within the Russian borders and accused the West of whipping up the war frenzy. Asked about the reports, Foreign Secretary Liz Truss told LBC Radio she had not seen it and would need to see more details, but added: “The Russians have claimed that they have no plans for an invasion, but we will need to see a full scale removal of troops to show that is true.” NN: This is not over until Russia stands down… If they stand down…..
Oil eases on profit-taking, Russia-Ukraine conflict remains key focus
Oil prices eased on Tuesday as investors scooped up profits from the previous day’s rally to seven-year highs and as global stock markets slumped, although lingering concerns that Russia might invade Ukraine and disrupt energy supplies limited losses.
TOKYO, Feb 15 (Reuters) – Oil prices eased on Tuesday as investors scooped up profits from the previous day’s rally to seven-year highs and as global stock markets slumped, although lingering concerns that Russia might invade Ukraine and disrupt energy supplies limited losses. Both benchmarks hit their highest since September 2014 on Monday, with Brent touching $96.78 and WTI reaching $95.82. Russia is one of the world’s largest oil and gas producers, and fears it could invade Ukraine have driven a rally in oil towards $100 per barrel, a level not seen since 2014. “Profit-taking weighed on the market while there was little fresh fundamental news and concerns over the Ukraine situation remained unchanged,” said Tsuyoshi Ueno, senior economist at the NLI Research Institute. “Investors are in a wait-and-see mood amid uncertainty over the conflict between Russia and Ukraine as well as the U.S.-Iran nuclear talks,” he said. Portfolio managers are still bullish on the outlook for oil. But prices have already risen by more than 30% in less than three months and there are growing concerns about rising inflation and interest rates, prompting fund managers to take some profit last week. Investors are also watching talks between the United States and Iran. The Iranian foreign minister said Iran was “in a hurry” to reach a swift agreement in nuclear talks in Vienna, provided its national interests are protected. Russian Foreign Minister Sergei Lavrov spoke to his Iranian counterpart Hossein Amirabdollahian on Monday and they noted a “tangible move forward” in reviving the Iran nuclear deal, the Russian foreign ministry said.
“Oil markets may see a real correction if the Iran-U.S. nuclear deal is agreed or global equities tumble further amid worries over inflation and tighter monetary policy by central banks,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities.
Asian share benchmarks dropped on Tuesday as investors contemplated the implications of a potential imminent Russian invasion of Ukraine. MKTS/GLOB Ukrainian President Volodymyr Zelenskiy called on Ukrainians to fly the country’s flags from buildings and sing the national anthem in unison on Feb. 16, a date that some Western media have cited as a possible start of a Russian invasion. Meanwhile, an upward revision in historical oil demand by the International Energy Agency in its monthly report points to a tighter global market than the West’s energy watchdog had previously estimated. Shortfalls in production by OPEC+, the Organization of the Petroleum Exporting Countries and allied producers, and spare capacity concerns are likely to keep the oil market tight and prices could hit $125 a barrel as early as the second quarter of this year, JP Morgan Global Equity Research said.NN:: fear not the rally is not over as long as the biggest invasion force since WWII is at the border of the Ukraine. Putin will not back down until he gets his strategic leverage over Europe.. Neutralizing NATO and the Nord Stream II pipe line open.Europe is foolish enough to not allow fracking, closing its Nuclear reactors and becoming Putins bitch. Hopelessly dependent on Russian oil and fas…. STUPID !!!!!