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Federal Reserve raises rates by 0.75%

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Re: Federal Reserve raises rates by 0.75%

#11

Post by hunterb123 »

rich_sasha wrote: post #6
nostromo wrote: post #4

It seems the Fed is stuck in a state of overreaction. First they overshoot on money printing, then they disregard early signs of inflation, and now they're in a panic in the opposite direction. Seeing the news this week that Bernanke said that the Fed should be able to pull off a soft-landing now in 2022 gave me an uncomfortable déjà vu -- he said the same in 2006 and 2007, right before he raised rates enough to kick…

In fairness, inflation seems largely driven by energy prices, which in turn are driven by the Russian invasion of Ukraine. Not the top event I'd imagine a bank predicting well.

then why was the administration dismissing it as temporary before the invasion?

inflation was clearly caused by injecting trillions into the economy for "covid" slush funds.

as far as energy goes, we were net exporters until the federal restrictions started coming in, only then did we start relying on foreign production.

blaming your domestic problems on a foreign adversary is routine, but it's not accurate, helpful, or even actionable.

does the "putin price hike" talking point really work on anyone? do they think we have memories of a gold fish?

Re: Federal Reserve raises rates by 0.75%

#12

Post by djbusby »

morninglight wrote: post #7

> Seniors, should reap the benefits of higher bank savings rates after years of piddling returns. Not to any significant degree. Bank rates won't come close to offsetting the effect of inflation. The big winner will be the IRS, as intended. .

How does IRS win here?

Re: Federal Reserve raises rates by 0.75%

#13

Post by twblalock »

rich_sasha wrote: post #6
nostromo wrote: post #4

It seems the Fed is stuck in a state of overreaction. First they overshoot on money printing, then they disregard early signs of inflation, and now they're in a panic in the opposite direction. Seeing the news this week that Bernanke said that the Fed should be able to pull off a soft-landing now in 2022 gave me an uncomfortable déjà vu -- he said the same in 2006 and 2007, right before he raised rates enough to kick…

In fairness, inflation seems largely driven by energy prices, which in turn are driven by the Russian invasion of Ukraine. Not the top event I'd imagine a bank predicting well.

Get out a calendar. Look at when the inflation started (last fall!). Then look at when the Ukraine war started.

Has the Ukraine war made the inflation problem worse? Yes. Did it cause the problem? Absolutely not!

Re: Federal Reserve raises rates by 0.75%

#14

Post by roody15 »

rich_sasha wrote: post #6
nostromo wrote: post #4

It seems the Fed is stuck in a state of overreaction. First they overshoot on money printing, then they disregard early signs of inflation, and now they're in a panic in the opposite direction. Seeing the news this week that Bernanke said that the Fed should be able to pull off a soft-landing now in 2022 gave me an uncomfortable déjà vu -- he said the same in 2006 and 2007, right before he raised rates enough to kick…

In fairness, inflation seems largely driven by energy prices, which in turn are driven by the Russian invasion of Ukraine. Not the top event I'd imagine a bank predicting well.

Agree the Russian invasion doesn't help matters... but this is not the primary cause of inflation. The amount of money that the US has simply created and spent in last couple of years in unprecedented. The amount of money inserted into the US economy dwarfs that of the TARPP and related bailouts of 2008 by a factor of 4. You just cannot create and hand out that much cash in an economy and not expect inflation.

Re: Federal Reserve raises rates by 0.75%

#15

Post by rolobio »

fibers wrote: post #9
rich_sasha wrote: post #6

Earlier quoted context omitted.

In fairness, inflation seems largely driven by energy prices, which in turn are driven by the Russian invasion of Ukraine. Not the top event I'd imagine a bank predicting well.

no one here buys the 'putin price hike' excuse

I was blown away when the president claimed he "has never seen anything like Putin’s tax on both food and gas". When did Putin get the ability to raise taxes in the US??

Re: Federal Reserve raises rates by 0.75%

#16

Post by JumpCrisscross »

nostromo wrote: post #4

It seems the Fed is stuck in a state of overreaction. First they overshoot on money printing, then they disregard early signs of inflation, and now they're in a panic in the opposite direction. Seeing the news this week that Bernanke said that the Fed should be able to pull off a soft-landing now in 2022 gave me an uncomfortable déjà vu -- he said the same in 2006 and 2007, right before he raised rates enough to kick…

> now they're in a panic in the opposite direction

Powell spoke when he didn't have to. He didn't have to speculate on inflation being transitory. He didn't have to make precise forecasts. But he did. That's left egg on the Fed's face. But calling a 75 bp rate hike panic is hyperbole.

Re: Federal Reserve raises rates by 0.75%

#17

Post by mark_l_watson »

You can argue either side to this, and make a good case.

My personal preference is to trigger a recession and reduce inflation. The easy cop-out solution is to say a "big f*ck off" to pensioners, lower middle class, and poor people and let inflation soar, but I believe that long term this would be more destructive to the general economy. Better take the long term view here and not kick the can down the street.

Re: Federal Reserve raises rates by 0.75%

#18

Post by iso1631 »

twblalock wrote: post #13
rich_sasha wrote: post #6

Earlier quoted context omitted.

In fairness, inflation seems largely driven by energy prices, which in turn are driven by the Russian invasion of Ukraine. Not the top event I'd imagine a bank predicting well.

Get out a calendar. Look at when the inflation started (last fall!). Then look at when the Ukraine war started. Has the Ukraine war made the inflation problem worse? Yes. Did it cause the problem? Absolutely not!

Supply chain prices have been increasing since covid as supply shut down and takes far longer to restore than demand. Just like certain parts of inflation (lumber) shot up in 2020 when demand went through the roof as everyone started working on projects (including things like outside offices for working from home)

Re: Federal Reserve raises rates by 0.75%

#19

Post by NDizzle »

nostromo wrote: post #4

It seems the Fed is stuck in a state of overreaction. First they overshoot on money printing, then they disregard early signs of inflation, and now they're in a panic in the opposite direction. Seeing the news this week that Bernanke said that the Fed should be able to pull off a soft-landing now in 2022 gave me an uncomfortable déjà vu -- he said the same in 2006 and 2007, right before he raised rates enough to kick…

Textbook weak leadership.

Re: Federal Reserve raises rates by 0.75%

#20

Post by JumpCrisscross »

mark_l_watson wrote: post #17

You can argue either side to this, and make a good case. My personal preference is to trigger a recession and reduce inflation. The easy cop-out solution is to say a "big f*ck off" to pensioners, lower middle class, and poor people and let inflation soar, but I believe that long term this would be more destructive to the general economy. Better take the long term view here and not kick the can down the street.

> personal preference is to trigger a recession and reduce inflation

These aren't binary outcomes. Tight money does nothing to ease supply-side bottlenecks. It does little to target demand displaced by rising energy prices. If those are the principal drivers of inflation, tightening could depress non-energy demand in a way that causes a recession without alleviating inflation. Stagflation. (To be clear, we're not at tight money yet.)

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