US Federal Reserve raises interest rates for first time since 2018 • Hacker News Board

Re: US Federal Reserve raises interest rates for first time since 2018

#281

Post by JaimeThompson » Wed, Mar 16, 2022, 9:30 PM UTC

tomc1985 wrote: post #187

tonguez wrote: post #158

Earlier quoted context omitted.

"For a lot of people, what is even the point of living if there's no retirement to enjoy?" The point is you are supposed to be helping other people in some way. Not just being a useless turd and forcing young functional people pay rent to you so that you can do nothing but sit on your fat ass and shit in your diaper. They also lived in a society that was much more prosperous than any young person ever will. Consideri…

> forcing young functional people pay rent to you so that you can do nothing but sit on your fat ass and shit in your diaper. They own the house, which they bought and paid for. It is their property to rent or not rent as they see fit. You pay money for said privilege. They are not squatting on communal property, and short of returning it to the market the property would otherwise sit unused and wasted. Are you sayin…

>Don't let generational nihilism color your vision so much.

>but young people think said opportunity looks like Twitch streaming or professional influencing or pretending that are innovating

Physician, heal thyself

Re: US Federal Reserve raises interest rates for first time since 2018

#282

Post by dlp211 » Wed, Mar 16, 2022, 9:30 PM UTC

IncRnd wrote: post #274

hn_throwaway_99 wrote: post #180

Earlier quoted context omitted.

Here are the first two paragraphs on the MMT Wikipedia article: > Modern Monetary Theory or Modern Money Theory (MMT) is a heterodox[1] macroeconomic theory that describes currency as a public monopoly and unemployment as evidence that a currency monopolist is overly restricting the supply of the financial assets needed to pay taxes and satisfy savings desires.[2][3] MMT is opposed to the mainstream understanding of…

> ...and that the primary risk once the economy reaches full employment is inflation, which seems to be precisely what has happened, no? Certainly, there is inflation. There isn't full employment.

Inflation has many inputs and looking at inflation strictly through a monetary lens will provide a distorted picture as to why there is inflation.

Additionally, MMT states that it needs to use taxes to manage inflation, which the US federal gov't is clearly not doing, which undermines the testability of the theory.

Re: US Federal Reserve raises interest rates for first time since 2018

#283

Post by boppo1 » Wed, Mar 16, 2022, 9:30 PM UTC

czbond wrote: post #12

standardUser wrote: post #9

Earlier quoted context omitted.

The Fed said to expect up to 7 increases this year.

And no one believes them. The bond market is doing the rate cuts for them.

> The bond market is doing the rate cuts for them.

Can you elaborate? I don't understand.

Re: US Federal Reserve raises interest rates for first time since 2018

#284

Post by zemptime » Wed, Mar 16, 2022, 9:30 PM UTC

IncRnd wrote: post #274

hn_throwaway_99 wrote: post #180

Earlier quoted context omitted.

Here are the first two paragraphs on the MMT Wikipedia article: > Modern Monetary Theory or Modern Money Theory (MMT) is a heterodox[1] macroeconomic theory that describes currency as a public monopoly and unemployment as evidence that a currency monopolist is overly restricting the supply of the financial assets needed to pay taxes and satisfy savings desires.[2][3] MMT is opposed to the mainstream understanding of…

> ...and that the primary risk once the economy reaches full employment is inflation, which seems to be precisely what has happened, no? Certainly, there is inflation. There isn't full employment.

MMT has seemed to me to be an academic fig leaf over the indirect taxation which occurs when more money is printed. MMT is fundamentally wrong, and everyone smart knows it is, but you as an individual can't make any sort of "respected" career as an economist unless you say the right things or are stupid enough to believe them.

Re: US Federal Reserve raises interest rates for first time since 2018

#285

Post by voisin » Wed, Mar 16, 2022, 9:31 PM UTC

godmode2019 wrote: post #152

SamuelAdams wrote: post #106

Earlier quoted context omitted.

I’m surprised this is top comment. Everyone ought to rebalance their assets as they get closer to retirement. If you are retired you should have a minimum of 3-10% of your portfolio in bonds, which typically fluctuate less than stocks. Then you draw from your bond assets to actually get money. As long as your stock assets aren’t touched for 3-5 years it doesn’t matter what the market does in the next few months.

You should have 60% bonds and 40% stocks As you get older 80% bonds 20% stocks. Source: The intelligent investor (famous finance book) People these days have 80% house, 15% crypto and 5% stocks

I think this particular advice from The Intelligent Investor is unreliable. Back then, bond yields were substantially higher, dividend yields were significantly higher, equity valuations we significantly lower, etc etc. The rest of the book is top notch though.

Re: US Federal Reserve raises interest rates for first time since 2018

#286

Post by trustfundbaby » Wed, Mar 16, 2022, 9:31 PM UTC

yalogin wrote: post #254

We did waste the 3 yrs before Covid hit by not increasing interest rates and not reducing Fed's money printing. I don't know if it's the fed or if the government pushing to win elections, but feels like we didn't take care of the house in good times and we have led ourselves into this cycle.

>We did waste the 3 yrs before Covid hit by not increasing interest rates and not reducing Fed's money printing.

Most of the money printing happened in 2020 and after. https://fred.stlouisfed.org/series/M1SL

Re: US Federal Reserve raises interest rates for first time since 2018

#287

Post by ericmay » Wed, Mar 16, 2022, 9:31 PM UTC

IncRnd wrote: post #274

hn_throwaway_99 wrote: post #180

Earlier quoted context omitted.

Here are the first two paragraphs on the MMT Wikipedia article: > Modern Monetary Theory or Modern Money Theory (MMT) is a heterodox[1] macroeconomic theory that describes currency as a public monopoly and unemployment as evidence that a currency monopolist is overly restricting the supply of the financial assets needed to pay taxes and satisfy savings desires.[2][3] MMT is opposed to the mainstream understanding of…

> ...and that the primary risk once the economy reaches full employment is inflation, which seems to be precisely what has happened, no? Certainly, there is inflation. There isn't full employment.

Aren't there record job openings?

I know "full employment" is a loaded term here, but at least in a general sense all who want a job could at least find something right?

One thing I'd be interested in seeing a discussion on as it relates to this topic is what happens when there is a legitimate labor shortage.

Re: US Federal Reserve raises interest rates for first time since 2018

#288

Post by OGWhales » Wed, Mar 16, 2022, 9:31 PM UTC

andreyk wrote: post #137

An interesting aspect of this is that the endless printing of money in the last few years was a sort of stress test of modern monetary theory, which has been seeing lots of discussion in those same years. I never quite understood how this theory would work while avoiding inflation, and what's happening now seems to at least be related - https://www.nytimes.com/2022/02/06/business/economy/modern-m... Conceptually the…

> I never quite understood how this theory would work while avoiding inflation

I see this sentiment any time MMT is brought up. I think it shows a misunderstanding of what MMT is saying.

While I’ve got my own issues with MMT, it’s always been made clear by MMTers that inflation is an important signal to respect and that you can’t infinitely ‘print’ money due to the constraint of real resources.

Re: US Federal Reserve raises interest rates for first time since 2018

#289

Post by travisgriggs » Wed, Mar 16, 2022, 9:32 PM UTC

throwaway894345 wrote: post #260

dragonwriter wrote: post #216

Earlier quoted context omitted.

Yeah, MMT basically asserts that the separation between fiscal and monetary policy is artificial, and that the only real constraint on “fiscal” policy (tax and spending) is monetary effects, not the metaphorical limited purse (“fisc”) that must be filled with revenue and borrowing to allow spending. It is not “Congress can spend willy-nilly” but “Congress needs to stop thinking about fiscal balance and start thinking…

Irrespective of its economic merits, any policy which depends on a competent and upright Congress does not inspire confidence. It feels like it's bound to be one of those "True MMT Hasn't Ever Been Tried (TM)" things.

Let’s rebrand it as Critical Fiscal Theory.

I’ve got my popcorn already.

Re: US Federal Reserve raises interest rates for first time since 2018

#290

Post by babypuncher » Wed, Mar 16, 2022, 9:32 PM UTC

throwaway0a5e wrote: post #143

mym1990 wrote: post #36

Earlier quoted context omitted.

We are not yet in stagflation, unless I really missed something. The economy is actually fairly strong by most indicators. The question is whether inflation can be tamed by the time we hit a recession(which we will, whether it is in 6 months, 2 years, 5 years, etc...)

Everyone is sure acting like it'll be 6-12mo and if everyone expects a recession in 6-12mo then...

These 6-12 month predictions for the next recession are always real popular 6-12 months before the next major election. I recall almost identical rhetoric in H1 2018, coincidentally the last time the fed raised interest rates.

Nobody has a clue when the next recession will be.