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Federal Reserve to increase interest rates by 75 basis points

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Re: Federal Reserve to increase interest rates by 75 basis points

#161

Post by AlexandrB »

nodesocket wrote: post #10

Now if we can only get states (like California) to stop giving out stimulus payments (they literally calling it inflation stimulus; learn economics 101) and drop student debt forgiveness nonsense. The fed is trying to curb inflation, while politicians are trying to get re-elected at any cost, fighting the fed.

This happens in reverse during recessions too, where governments will cut spending and do "austerity" when stimulation is what's called for. That's why the Fed is nominally independent - so it can implement unpopular policies.

Re: Federal Reserve to increase interest rates by 75 basis points

#162

Post by option »

mjr00 wrote: post #87
mywittyname wrote: post #47

I'm skeptical that interest rate hikes will curb inflation. I'm even skeptical that a recession will curb inflation. We have significant shortages of so many products and services that people rely on and the only way I see the situation improving is if supplies increase, maybe dramatically. It's too difficult to curb demand for things like food and housing if the population is growing. Those are things we just need t…

> It's too difficult to curb demand for things like food and housing if the population is growing. It's also difficult (impossible) to curb demand for housing if housing is far and away the best investment you can possibly make, both in the short, medium, and long-term. Unfortunately, so many people in the west have their net worth tied up in their homes that policies directly targeting property values is political s…

no individual landlords? no corporate landlords? What kind of “landlords” then? Just don’t suggest some type of “communal/socialist” housing. Been there (ussr) - f#*%k that and everything related to it.

Re: Federal Reserve to increase interest rates by 75 basis points

#163

Post by abigail95 »

lisper wrote: post #146
pbk1 wrote: post #103

Earlier quoted context omitted.

> if housing is far and away the best investment you can possibly make, both in the short, medium, and long-term. citation needed? genuinely curious - are there studies about long-term returns from housing vs. other asset classes (namely public equities)?

No, there aren't, because it isn't true. Residential real estate underperforms equities [1]. [1] https://jai.pm-research.com/content/23/2/111

Does this account for the subsidy, tax advantages and leverage available in real estate vs equities?

Re: Federal Reserve to increase interest rates by 75 basis points

#164

Post by ta8645 »

LetsGetTechnicl wrote: post #97

What is being to address the price gouging by companies? Oil and gas companies are seeing record profits, how can it be just inflation that costs are going up?

How exactly can a company price-gouge in a free market? First, nobody is compelled to buy anything from them. Second, anyone else is allowed to become a supplier, and easily make a fortune by offering a cheaper price.

And the only thing that prevents the above from being true, is oppressive government policies that undermine the freemarket, which are sold to the people as "for their protection".

Re: Federal Reserve to increase interest rates by 75 basis points

#165

Post by pm90 »

vuln wrote: post #141
pm90 wrote: post #76

Earlier quoted context omitted.

No. Easiest by far is to relax immigration restrictions.

The US has shattered record numbers of migrants crossing the southern boarder every month for over a year. It has had zero deflationary effects if anything it causes the supply to shrink even further as demand skyrockets. Migrants still need to be housed, feed, clothed and transported. There is no easy way out.

First, the question is about labor supply.

Second, people crossing the southern border will never be large enough to affect the US labor market. Only increasing legal immigration can have meaningful effect on the labor supply.

Re: Federal Reserve to increase interest rates by 75 basis points

#166

Post by enragedcacti »

pbk1 wrote: post #103
mjr00 wrote: post #87

Earlier quoted context omitted.

> It's too difficult to curb demand for things like food and housing if the population is growing. It's also difficult (impossible) to curb demand for housing if housing is far and away the best investment you can possibly make, both in the short, medium, and long-term. Unfortunately, so many people in the west have their net worth tied up in their homes that policies directly targeting property values is political s…

> if housing is far and away the best investment you can possibly make, both in the short, medium, and long-term. citation needed? genuinely curious - are there studies about long-term returns from housing vs. other asset classes (namely public equities)?

My understanding is that it shakes out to a couple of things:

1) while not beating the S&P, historical returns on real estate are pretty good and less volatile

2) There are a number of significant tax advantages to home ownership

3) you can't live inside a stock. Building equity instead of paying rent is a good thing

4) you can rent it out, making it pay for itself while accruing value as long as you are willing to add your own labor

It's hard to put that all into a chart since (2) and (3), and (4) are personalized and partially mutually exclusive and the tax landscape is always changing.

Re: Federal Reserve to increase interest rates by 75 basis points

#167

Post by spfzero »

mjr00 wrote: post #87
mywittyname wrote: post #47

I'm skeptical that interest rate hikes will curb inflation. I'm even skeptical that a recession will curb inflation. We have significant shortages of so many products and services that people rely on and the only way I see the situation improving is if supplies increase, maybe dramatically. It's too difficult to curb demand for things like food and housing if the population is growing. Those are things we just need t…

> It's too difficult to curb demand for things like food and housing if the population is growing. It's also difficult (impossible) to curb demand for housing if housing is far and away the best investment you can possibly make, both in the short, medium, and long-term. Unfortunately, so many people in the west have their net worth tied up in their homes that policies directly targeting property values is political s…

Housing is a good investment as long as people can afford the rent, and want to live there. If people could not, or do not want to live there, the house stays vacant and it becomes a poor investment.

When housing becomes a bad investment, very few people will spend their money and time building new ones.

The demand for housing depends on demographics, it has nothing to do with it being a good or bad investment. But whether it is a good or bad investment has a lot to do with demand for housing.

Re: Federal Reserve to increase interest rates by 75 basis points

#168

Post by sva_ »

thatguy0900 wrote: post #107
BitwiseFool wrote: post #83

Earlier quoted context omitted.

What I find tragic is that 'we' had all this time to gradually increase the retirement age but didn't do so. I can totally understand the political backlash of trying to immediately increase the retirement age, as old people vote and young people don't. However I feel like forward looking legislators could have passed gradual increases on future generations. If we know life expectancy is gradually going upwards, why…

Young people arnt jazzed about raising retirement either. I would like to retire some day as well. Not looking forward to the future where I get to "retire" at 80 or 90 because the generation before me couldn't handle a budget.

If I look at the age pyramid of my country, Germany, I have absolutely no idea how this system is supposed to be maintained over the next 10-20 years:

https://upload.wikimedia.org/wikipedia/commons/3/32/Alterspy...

The bulk of people are at an age now, that they'll retire soon or are retiring. Even though we already import tons of young people (look at the amount of young males vs females - 50% of young people here have a migration background), I can't imagine we can import enough young laborers from other countries, and Germans don't reproduce nearly enough - which is understandable considering how things are going.

Re: Federal Reserve to increase interest rates by 75 basis points

#169

Post by rxhernandez »

ParksNet wrote: post #66
mywittyname wrote: post #47

I'm skeptical that interest rate hikes will curb inflation. I'm even skeptical that a recession will curb inflation. We have significant shortages of so many products and services that people rely on and the only way I see the situation improving is if supplies increase, maybe dramatically. It's too difficult to curb demand for things like food and housing if the population is growing. Those are things we just need t…

Easiest way to increase labor supply is to immediately increase the retirement age to 70. Welfare and retirement systems across the West are insolvent at current settings anyway.

I really doubt that. My mom has quite a few friends that are retired (she's in quite a few hiking and cycling groups) and all of them are doing at least some part-time work.

I think it's incredibly cruel that they have to work at all at their age. If my mom hadn't planned her retirement well and people tried to put her back to full-time work, I would eat the cost of taking care of her needs if the state didn't. I mean she was really struggling to do her job at the end.

Re: Federal Reserve to increase interest rates by 75 basis points

#170

Post by paulpauper »

benjaminwootton wrote: post #159

I wonder if people are starting to question if the magnitude of the Covid response was justified now the bill is becoming due? Is anyone willing to put their head above the parapet of supporting the shutdowns and now realising it wasn’t worth the cost? Huge inflation, generational debts, increased poverty, broken systems left right and centre etc etc. Or does Putin get all the credit?

real economic growth since 2020 is still positive despite inflation and covid
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