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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

#651

Post by phkahler »

jjoonathan wrote: post #46
phkahler wrote: post #29

Earlier quoted context omitted.

>> Is lowering interest rates a method to overcome a recession? It is claimed to be. The idea is that with lower interest rate, companies and people will be more likely to borrow money to spend and that will boost the economy. I for one do not really believe this to be true. I suspect it's the act of lowering rates that gives a temporary boost until things rebalance. In other words, economic activity has some depende…

> economic activity has some dependence on the derivative of interest rates If interest rates go down, it's easy to roll over old promises and make new ones besides. If interest rates go up, promises must be kept or the business will fold. At the end of every business cycle, interest rates are low and there are lots of unprofitable "zombie companies" that operate by simply rolling over their promises. In order for th…

>> last time around Carter did the burn and Reagan got the growth and the credit, so the question is who wants to be Carter this time around.

You are only the second person to tell me this story. I'm not doubting it, the first guy said it to me over 15 years ago right before the bust as he was buying 6 percent treasuries.

Probably the right time to do it would have been around 2000, the last time the government ran a surplus (last years of Clinton, first year of Bush jr.) but instead we heard: There's a surplus, we don't know why, but we don't think it will go away, so here have some money, and lets spend like crazy and have a war.

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

#652

Post by phkahler »

blagie wrote: post #49
phkahler wrote: post #29

Earlier quoted context omitted.

>> Is lowering interest rates a method to overcome a recession? It is claimed to be. The idea is that with lower interest rate, companies and people will be more likely to borrow money to spend and that will boost the economy. I for one do not really believe this to be true. I suspect it's the act of lowering rates that gives a temporary boost until things rebalance. In other words, economic activity has some depende…

I think what you're describing is exactly what's claimed. /Lowering/ interest rates leads to growth, not low interest rates. I don't think many economists would dispute that. The general model is that interest rates, lowering taxes, and increasing government spending are tools for shoring up the economy during a recession. During a growth period, interest rates should be raised, government spending lowered, and taxes…

>> I think what you're describing is exactly what's claimed. /Lowering/ interest rates leads to growth, not low interest rates. I don't think many economists would dispute that.

No, they treat is as if the steady state economy will be larger at a given lower rate. For example GDP = X+Y+Z + K/rate. What I'm saying is that GDP = X+Y+Z + K/rate' which is not sustainable at all and means existing policy is not at all the right way to handle it. Actually there may be some degree of truth and both terms should be present in the equation, but nobody talks or acts like the derivative term exists.

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

#653

Post by SubiculumCode »

dang wrote: post #346
jonnycomputer wrote: post #172

Good thing I didn't come here for informed economic commentary. Now back to the blogosphere.

" Please don't sneer, including at the rest of the community. " It's reliably a marker of bad comments and worse threads. https://news.ycombinator.com/newsguidelines.html If you know more than others do, that's great—but then you should either share some of what you know, so the rest of us can learn, or just accept that people are wrong on the internet. Posting supercilious putdowns doesn't help anything. https://hn.…

I think the problem is people who don't know who post anyway on HN. We'd all prefer the xperts get the most voice, and others mainly sticking to questions.

May I suggest the following addition to HN: Each post-requires a self rating 1-5 Likert on their expertise/experience in the topic, then allow a sorting feature of greatest to least expertise.

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

#654

Post by horns4lyfe »

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 haven’t studied MMT enough to be able to comment on it beyond a surface level, and the economists behind are smart, accomplished people. What I do know is that in the real world of policy, MMT will just be used as an excuse to spend limitless amounts of money by politicians that also don’t understand it.

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

#655

Post by jeffalbertson »

spiralx wrote: post #552
colechristensen wrote: post #262

Earlier quoted context omitted.

The fed was able to maintain a functioning economy without major disruption in essentials (i.e. there weren't major shocks in being able to buy food or maintain housing) despite shutting down or significantly modifying large sections of the economy for a significant time. They aren't "trapped" this is the natural and expected consequence of creating a lot more money to sidestep a temporary condition. Considering the…

> Bitcoin, gold, and anti-fed fanboys have a tendency to have a poor understanding at best of global economics with very basic misunderstandings like thinking that bumping the rate bumps the rates of all previous bonds. Discussion on this post is worse than the usual level of discussion here, and the usual level around these topics isn't great at best. Hard to discuss monetary policy with someone who doesn't know wha…

Not trying to be a rude but why even make this comment? Just saying something is bad and inferring people are amateurs without offering any insight yourself is just as useless as the opinions you think are uninformed

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

#656

Post by MuffinFlavored »

Amfy wrote: post #422
MuffinFlavored wrote: post #398

Earlier quoted context omitted.

How did "printing lots of money" https://fred.stlouisfed.org/series/CURRCIR not spike USD to EUR? did EUR also print lots of money? https://finance.yahoo.com/quote/USDEUR=X/ basically unchanged 5 years ago -> now

EUR has negative interest. You pay to deposit money at banks. Yes, EUR has been printing a lot as well. Also, from my understanding, EURUSD goes up/down mostly based on their difference in interest rates.

If we haven't devalued our USD currency against the EUR because we printed while they also printed, is there a currency that we did devalue ourselves against (or a country that didn't devalue their own currency through printing?)

Does printing always actually equate to devaluation?

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

#657

Post by MuffinFlavored »

umeshunni wrote: post #563
MuffinFlavored wrote: post #405

Earlier quoted context omitted.

Have you peeled back the categories measured by the 8% inflation? This is stupid for me to say but, for example... Used car prices factor into that 8% number. But if you aren't shopping for a used car... it doesn't really affect you, right? Housing affects mostly everybody. Same with energy. I don't truly understand the weighting or everything that goes into the 8% CPI getting tossed around and I understand that it c…

> Housing affects mostly everybody. Housing mostly only affects renters (~40% of the market) and is also not evenly distributed geographically. While rents in Miami might spike 40% in a year, that affects only (0.4 * 900K)/100M of households in the US.

Where'd you get the 900k figure?

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

#658

Post by jeffalbertson »

colechristensen wrote: post #262
jeffalbertson wrote: post #186

so many people in this thread will play the common HN intellectual and exclaim how the fed is obviously trapped, or what they did wrong to do get us here. And in a different thread will trash bitcoin only focusing on its energy consumption and not its potential sound money properties. If Bitcoin is bad, and the Fed (and every government ever) created a situation which will only lead to poverty & widening wealth gap,…

The fed was able to maintain a functioning economy without major disruption in essentials (i.e. there weren't major shocks in being able to buy food or maintain housing) despite shutting down or significantly modifying large sections of the economy for a significant time. They aren't "trapped" this is the natural and expected consequence of creating a lot more money to sidestep a temporary condition. Considering the…

Grocery stores were emptied but i'll agree that people weren't starving. Maintain housing? I am knee deep trying to buy my first house and completely priced out of my home state. We've had 5 offers on houses now go ~100k over asking. It is brutal out there on housing. Moving to another state means leaving my extended family and taking a pay cut due to company pay scale policies for out of CA workers.

25bps wont help 7.9% inflation. We cant substantially raise rates like the 80s because there is too much debt. The current war will cause trade & commodity issues that wont reveal themselves till late this year. The current admin just signed another 1.5 trillion. And they will keep creating money to finance war or bail out bad situations they themselves created. Middle class and lower are screwed

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

#659

Post by dang »

SubiculumCode wrote: post #653
dang wrote: post #346

Earlier quoted context omitted.

" Please don't sneer, including at the rest of the community. " It's reliably a marker of bad comments and worse threads. https://news.ycombinator.com/newsguidelines.html If you know more than others do, that's great—but then you should either share some of what you know, so the rest of us can learn, or just accept that people are wrong on the internet. Posting supercilious putdowns doesn't help anything. https://hn.…

I think the problem is people who don't know who post anyway on HN. We'd all prefer the xperts get the most voice, and others mainly sticking to questions. May I suggest the following addition to HN: Each post-requires a self rating 1-5 Likert on their expertise/experience in the topic, then allow a sorting feature of greatest to least expertise.

Such a measure wouldn't generate accurate self-evaluations, it would just add noise.

Commenting about things they don't know about is...what human beings do.

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

#660

Post by xxpor »

landemva wrote: post #603
xxpor wrote: post #386

Earlier quoted context omitted.

The state has a monopoly on money because they collect taxes. Try paying your taxes in BTC and tell me how that goes.

What do you mean by, 'Try paying your taxes in BTC ...' ? In USA, sales taxes are paid to government by the vendor. As just a typical person in USA who does not work for federal government nor reside in D.C., sales taxes and property taxes are all that I (implicitly) pay. The vendor and I determine amount and type of my payment. Your comment had a threatening tone implying something bad may happen. What is the lurkin…

You don't pay federal income taxes?
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