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Federal Reserve raises rates by 0.75%

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Re: Federal Reserve raises rates by 0.75%

#281

Post by moneywoes »

timmg wrote: post #62
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.

Related (but different): I'm wondering how much inflation will shift tax payers into higher brackets and increase the overall income for the government from those taxes.

Aren’t the brackets adjusted by inflation? M

Re: Federal Reserve raises rates by 0.75%

#282

Post by dontblink »

bpicolo wrote: post #189
blip54321 wrote: post #108

Earlier quoted context omitted.

I have mixed feelings on tech stocks. I feel like the general competence has gone down, and that makes them vulnerable. Google is a shitshow right now. I don't think they can do B2B. Chrome Extensions. GSuite Free. Google Workspace App security audits. I can list of dozens of other disruptions like that. No one trusts them. At the same time, cost structure is astronomical; employee count has grown exponentially, to m…

If amazon’s main issue is the scams and knockoffs, how is aliexpress the cure?

It equalizes them. And products on AliExpress are cheaper. But that, of course, depends on the US relationship with China which doesn't seem to be getting friendlier.

Re: Federal Reserve raises rates by 0.75%

#283

Post by [deleted] »

qgin wrote: post #222
susanasj wrote: post #200

remarkable how many people in this thread are assuming the bottom of the income distribution is hurt the most by inflation. Think about who has debt (mortgage, student, medical expenses, car payments) and who that debt is owed to (banks, corporations) and what happens to that debt in real dollars when inflation is happening. The debt becomes less meaningful. Wages rise (they have in fact been rising), and the payment…

You're very right, but I think the trick is that prices rise faster than wages, if they ever fully catch up. That lag between price and wage increase is a super immediate problem for anyone going paycheck-to-paycheck.

[deleted]

Re: Federal Reserve raises rates by 0.75%

#284

Post by deathanatos »

Nemi wrote: post #182
Supermancho wrote: post #147

Earlier quoted context omitted.

People at my company have, in all-hands meetings. Is the company going to raise our salaries to compensate from the widely acknowledged inflation that's going on, given the company nets billions a year? No comment.

Companies rarely increase wages of existing employees commensurate with inflation. You get the appropriate inflation-adjusted increase only when you switch jobs. It is the one bit of leverage you have as an employee - I would suggest using it. Complaining to management feels good but gets you nowhere.

They used to. Some do, I hear.

My parent made a living working for the same employer. My SO's parent made a living working for the same employer. Somehow, not canning the entire staff every two years worked for their generation.

Meanwhile, I work for tech companies where hardly anyone knows anything because nobody has any experience because the entire workforce has to turn over every two years just to try to recoup what inflation has devalued their salary to?

Re: Federal Reserve raises rates by 0.75%

#285

Post by 30944836 »

gw67 wrote: post #253

Why the market went up after the FED raised interest rate? Shouldn’t raising rates bad for stocks?

The interest rate was hike was baked into the price already. Now there's a re-shuffle where people with higher risk tolerances start buying up stocks that are on sale.

Re: Federal Reserve raises rates by 0.75%

#286

Post by slaw »

nemo44x wrote: post #214
tamaharbor wrote: post #36

Earlier quoted context omitted.

When inflation was surging in the late 1970s and early 1980s, CD rates exceeded 10%.

And a mortgage came with a 16% rate. No thanks!

And monthly rate was lower than now with 5.5% mortgage. Yes, I want it.

Re: Federal Reserve raises rates by 0.75%

#287

Post by Barrera »

> The Fed’s hike Wednesday and its new projections are expected to ripple through the economy, sharply pushing up rates for credit cards, home equity lines of credit and mortgages, among other loans. Fixed, 30-year mortgages already have climbed to 5.23% from 3.22% early this year on the expectation of significant Fed moves.

The notion that the Federal Reserve has this kind of influence over longer rates may not be correct. Have a look at the 10-year rate over many decades (click on "Max" for full range):

https://fred.stlouisfed.org/series/DGS10

Is this the curve you'd expect if the Fed really controlled rates that far out? I'm not so sure. Seems like factors well beyond the Fed's control are running the show, demographics and deindustrialization being the most likely contenders.

That blip out of trend near the end is where we are today. When any chart exits a channel that long-running, it's time to pay attention and consider that the old models are broken. Those rates might be rising for reasons that have nothing to do with the whatever the FOMC thinks it wants.

Re: Federal Reserve raises rates by 0.75%

#288

Post by salawat »

xxpor wrote: post #106
SketchySeaBeast wrote: post #68

Earlier quoted context omitted.

What's the good play here? Cause a recession or price those lower middle class out of being able to afford the cost of living? Typically they aren't the ones with the best negotiating power.

Raising taxes to take money out of the system. With that you have control over who the pain hits. Some specific areas that are getting hit hard like housing have specific problems that need to be fixed, like zoning.

Cost of taxes just gets passed on to the consumer.

Or as Traders say...

>It's priced in.

Tax does not do anything to extract money in the end from anyone but the consumer; or at least not any tax that I've bothered to actually sit down and trace in the rare accounting mood.

Re: Federal Reserve raises rates by 0.75%

#289

Post by QuarterReptile »

manfre wrote: post #76
QuarterReptile wrote: post #57

Earlier quoted context omitted.

I think you would need monarchy (or something more tyrannical) to get that. Democracies seem reliably short-sighted. The personal responsibility of taking on debt is so thoroughly attenuated in a democracy that piling on ($90k per citizen and counting, in the US) debt is the expedient thing to do, and it's seemingly impossible to overcome the electoral price paid for trying to reject that expedient option.

The US effectively had that with the executive and legislative acting the way they did the years before COVID.

No monarch could ever have a sufficiently split personality to even mimic all the different ways things get pulled in a government where hundreds of people battle to make decisions. The US had (and has) no coherent vision but operates on a scale where that is not a viable option.
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