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US Federal Reserve raises interest rates for first time since 2018

theguardian.com

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

#361

Post by bskap »

AceJohnny2 wrote: post #334
drexlspivey wrote: post #294

Earlier quoted context omitted.

Unemployment unemployed work force

How is "unemployment" defined in the US? Take those numbers with a grain of salt. In France, you were counted as "unemployed" if you were registered with the national employment agency and actively looking for employment according to their criteria . If you didn't find anything (for example because the opportunities on offer were too far away, or various other reasonably human reasons) after a certain time, the agenc…

The US uses a large-scale survey for unemployment rather than tying it to the unemployment process. The official definition most people quote is based on responses to the survey of "have not worked recently, have looked for work recently" but there are also broader measures of unemployment that count people who want to work even if they haven't looked, as well as people working part time who want to work full time.

Using even the broadest measure of unemployment[1], numbers are back down where they were before Covid. The labor force participation rate is still down though[2] which means that about 2% of US adults aren't looking to go back to work at all- many of them are likely now retired, students, or stay-at-home parents.

[1] https://fred.stlouisfed.org/series/U6RATE [2] https://fred.stlouisfed.org/series/CIVPART

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

#362

Post by Sohcahtoa82 »

thehappypm wrote: post #96
mactitan wrote: post #54

The Fed is trapped: It can’t raise too much since trillions of debt rely on very low rates. If it doesn’t raise enough then inflation will cause a recession.

A recession may be all right. Americans have a gigantic amount saved up and so long as it’s mild enough it’ll probably strengthen the dollar.

You are living in a bubble. This may be true for you and the people you associate with, but for the majority of Americans, it's not true in the slightest.

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

#363

Post by IncRnd »

bskap wrote: post #357
IncRnd wrote: post #321

Earlier quoted context omitted.

That's U-3. U-6 is at 7.2%. In general the claim that many people are not returning to work after COVID lockdowns is true. The reasons are up for debate, but that's not the point. The U-3 rate is an artificial rate to claim as the truth. That's moving the goal posts in order to get the win. Plus there are a record number of unfilled job openings.

U-6's 7.2% is compared to 7.0% in February 2020 and 8.1% in February 2007. So even that is similar to pre-Covid levels and better the the peak before the last recession.

How does that apply to full employment?

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

#364

Post by dragonwriter »

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.

MMT isn't a thing to try or be tried: it's not an ideology or set of policies or even policy goals (there is a very loose correlation between adherence to MMT and certain progressive policy goals, but they aren't the same thing.)

MMT is an understanding of factual nature of the environment in which government operates. Reduced to one sentence it is “the entire concept of fiscal balance is play-acting as if the government was using commodity or externally-controlled fiat currency, rather than it's own fiat and a distraction from the real constraints on government finance, rather than something which reflects, or even loosely guides policy makers towards, the real constraints.”

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

#365

Post by dustingetz »

deutschew wrote: post #215
dustingetz wrote: post #202

Earlier quoted context omitted.

A lot of the problems of focusing on equality can be connected to internet media making visible a tremendous amount of previously hidden inequity, (literacy rates are highest ever right?), I don't see what it has to do with interest rates I do see a separate parallel problem of too much dumb capital chasing returns that are in the past not the future, but that can also be connected to the maturation of internet/web p…

My point was that wealth gap increased due to QE and a class war masked as racial equity is being waged amongst the 99% as a result (without any net benefit to society since the 1. source of wealth come from excess supply of money which makes debt cheap for those in position to take advantage of it vs those who are oppressed by it 2. increasingly diminishing to non-existent value added widgets and services being sold…

"source of wealth come from excess supply of money which makes debt cheap for those in position to take advantage of it vs those who are oppressed by it"

what do I need to read to understand this

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

#366

Post by loufe »

duncan-donuts wrote: post #107
anonporridge wrote: post #74

Earlier quoted context omitted.

It's rough. On the one hand, retirees bring nothing of real value to the economy. We serve them because of the obligations they built up over their working careers. But, they get the focus of attention because a) they have all the money, b) they have all the time to be engaged in politics, and c) they vote. But they're purely an extractive cost center. A kind of economic parasite that keeps getting bigger and bigger…

You're talking about living breathing humans. "extractive cost center" is a weird way to describe "person who paid social security their entire working life". You're not wrong about what you're saying but fuck can you act like there's real people involved here and not just numbers? Are retirees _really_ economic parasites? Let's not forget that consumption is bringing in revenue to _someone_ which does provide value…

Sure it's not the most humanizing but it is valuable to disassociate oneself from our human side in order to analyze inhuman systems. The perspective isn't without value, and GP wasn't implying it wasn't, but to take the time to elaborate the point going through the motions to emotional pad it would have been time wasted for most of us.

It's something I appreciate about this community, that we can express ourselves in such ways in order to convey a point without any fat on it. I still assume the person making the point understands that there the fat is there without needing to explicitly mention it. It's a sign of mature dialogue IMO.

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

#367

Post by dustingetz »

boppo1 wrote: post #247
deutschew wrote: post #215

Earlier quoted context omitted.

My point was that wealth gap increased due to QE and a class war masked as racial equity is being waged amongst the 99% as a result (without any net benefit to society since the 1. source of wealth come from excess supply of money which makes debt cheap for those in position to take advantage of it vs those who are oppressed by it 2. increasingly diminishing to non-existent value added widgets and services being sold…

It's over man. Just sit back and watch it hit the wall. Anyone who has never sat down and modeled out a DCF in excel can't tell the difference between your argument and the crackpot ones on 4chan about jewish illuminati. Half of the people who have modeled out a DCF have enough assets to maybe have a chair when the music stops, and they won't risk it trying to explain how the game works to anyone who doesn't already…

For others- https://www.wallstreetprep.com/knowledge/dcf-model-training-...

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

#368

Post by bskap »

IncRnd wrote: post #363
bskap wrote: post #357

Earlier quoted context omitted.

U-6's 7.2% is compared to 7.0% in February 2020 and 8.1% in February 2007. So even that is similar to pre-Covid levels and better the the peak before the last recession.

How does that apply to full employment?

The 5% = full employment threshold has always been calculated based on U3. That's what they measured to come up with that estimate. If you want to talk about how U6 is better, then you need to compare it to previous U6 measurements, not previous U3 measurements.

If, as you were implying, U3 was hiding extra unemployment right now but U6 was more accurate, then it wouldn't be so closely tracking U3.

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

#369

Post by notch656a »

Sohcahtoa82 wrote: post #362
thehappypm wrote: post #96

Earlier quoted context omitted.

A recession may be all right. Americans have a gigantic amount saved up and so long as it’s mild enough it’ll probably strengthen the dollar.

You are living in a bubble. This may be true for you and the people you associate with, but for the majority of Americans, it's not true in the slightest.

Median household wealth is over $100k. Not only is it true far more than the slightest, it's true of the majority of American households.

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

#370

Post by cjbgkagh »

UncleOxidant wrote: post #275
lvl102 wrote: post #270

Higher rates won’t impact US as much as they will impact emerging economies. Those countries will face food crisis in addition to rapidly rising debt costs. Keep an eye on this because we are on cusp of civil unrests across the globe.

War in Ukraine will have a much larger effect. Something like ~25% of global wheat supply comes from Ukraine and Russia. There won't be any planting to speak of in Ukraine this spring. And Russian wheat is pretty much off the world market.

I’ve heard from Russian sources (so take with grain of salt) that they’ve avoided the center of Ukraine to allow locals to plant food. So maybe some planting may take place.
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