Federal Reserve raises rates by 0.75%

Post by mmarq » Wed, Jun 15, 2022, 7:35 PM UTC

Someone1234 wrote: post #79

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.

Inflation is largely being driven by import problems and oil prices, therefore, it is unclear if a recession is a golden key to lower inflation. Keep in mind that oil is internationally expensive, and even a reduction in the US may not bring down prices significantly . So we could see recession AND inflation at the same time. Then tack on higher interest rates, and everything goes squish.

Post by dnadler » Wed, Jun 15, 2022, 7:35 PM UTC

readams wrote: post #61

dnadler wrote: post #26

Something I haven’t seen discussed much is the impact of inflation on the existing federal debt. This is actually a positive for taxpayers as the federal debt will become cheaper. Obviously we’re still spending a ton and are issuing debt at higher rates now, so it’s not some kind of magic cure or anything.

Most of the debt is shorter term and must be continually rolled over. So when first moving from low expectations of inflation to high expectations, there is a temporary one-time gain, but after that the government will need to pay higher interest. And of course when the expectations return to normal there is a period when the government must pay higher than needed rates.

Post by hunterb123 » Wed, Jun 15, 2022, 7:35 PM UTC

JaimeThompson wrote: post #172

hunterb123 wrote: post #113

Earlier quoted context omitted.

We were net exporters during covid under the last admin. This is the policy the current admin enacted that cut our production: https://www.csis.org/analysis/biden-makes-sweeping-changes-o... Please point to something that supports your theory that "covid did it" and oil companies are "dragging their feet". - edit, at my post limit - @vel0city: Banning new leases two years ago hurt our production output. Banning new s…

Here is one example. "Not Even at $200 a Barrel: Shale Giants Swear They Won’t Drill More" [1] https://energynow.com/2022/02/not-even-at-200-a-barrel-shale...

Post by legitster » Wed, Jun 15, 2022, 7:36 PM UTC

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.

Post by thatjoeoverthr » Wed, Jun 15, 2022, 7:36 PM UTC

susanasj wrote: post #181

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.

I don't think it's that simple. Lower middle class and poor people have debt, and inflation is good for making debt less valuable in real dollars. Pensioners, maybe, but social security is indexed to inflation if I'm not mistaken? I wouldn't be surprised if many public and private pensions are as well. This is much more a move in favor of the rich that are owed money by the poor imo.