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Federal Reserve to increase interest rates by 75 basis points

federalreserve.gov

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

#201

Post by genericresponse »

setgree wrote: post #189

Why does the Fed write the way it does? First, this article buries the lede. The first seven sentences are framing. Only sentences 8-9 are actually news. The next four are, again, context. The headline also does not actually say what happened. Second, of the fourteen sentences here, a full six are trivially true -- "The Committee is highly attentive to inflation risks. The Committee seeks to achieve maximum employmen…

Because they aren't writing for a general audience. They're writing for an academic, professional finance, and governmental audience. It's extremely relevant that their word choice is being scrutinized for suggestions of what their future policy will be. Similarly, their use of jargon would be well understood by their audience. Context matters in communication.

You could consider this almost ritualized. That's something very different than corporate doublespeak that seeks to obscure rather than inform.

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

#202

Post by throw_m239339 »

pm90 wrote: post #180
throw_m239339 wrote: post #138

Earlier quoted context omitted.

> No. Easiest by far is to relax immigration restrictions. Easiest way to make citizens of a country vote for anti-immigration parties is to significantly increase immigration.

Regrettably, This is what does tend to happen. But its also a failure of society because immigrants are easy targets for scoring political points, despite it being repeatedly shown how beneficial immigration has been to Western econonomies.

> how beneficial immigration has been to Western econonomies.

Western way of life is unsustainable and no amount of immigration will change that. To govern is to predict and the west needs to prepare itself for a post industrial, post energy hungry era.

https://en.wikipedia.org/wiki/Degrowth

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

#203

Post by 8note »

trashtester wrote: post #152
seibelj wrote: post #80

Earlier quoted context omitted.

I'm a huge fan of so-called "price gouging". Without the ability to increase prices the shelves would be bare. This is what happens in all countries with price controls. You say price gouging, I say protecting society from itself.

There are three alternativies when supply is short: 1) Increase prices until demand matches supply. 2) Price controls, usually leading to empty shelves. 3) Rationing. 1 is preferrable in 99% of cases. 2 is always the worst. 3 is needed during extraordinary times, such as when a country is in an all-out war.

1 is rationing too, just rationing to prioritize the wealthy. The more modern versions ration based on other things, like how to combat ticket scalping, bands release tickets through alternative means

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

#204

Post by OGWhales »

JumpCrisscross wrote: post #142
laweijfmvo wrote: post #129

Earlier quoted context omitted.

Probably just my pet peeve, but everyone conflates inflation with CPI. We've had the ridiculous inflation starting in 2008 (and doubling down in 2020), now we're seeing the CPI. Why this matters (just my theory): previously all that new money went to banks, the stock market, VC, etc., not so much directly to consumers. So we saw the stock market explode, but not so much for the price of eggs. Now we have supply chain…

> everyone conflates inflation with CPI. We've had the ridiculous inflation starting in 2008 (and doubling down in 2020) You may be confusing money supply with inflation. Inflation measures price levels. We haven’t had “ridiculous inflation” since 2008. (In the early parts of the crisis we actually deflated.) CPI is a good measure of inflation, albeit one among many.

I believe they are talking about asset inflation as opposed to price inflation.

ZIRP era and QE did lead to some substantial asset inflation but was not considered to be problematic to many at the time.

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

#205

Post by JumpCrisscross »

boppo1 wrote: post #187
JumpCrisscross wrote: post #142

Earlier quoted context omitted.

> everyone conflates inflation with CPI. We've had the ridiculous inflation starting in 2008 (and doubling down in 2020) You may be confusing money supply with inflation. Inflation measures price levels. We haven’t had “ridiculous inflation” since 2008. (In the early parts of the crisis we actually deflated.) CPI is a good measure of inflation, albeit one among many.

That stock market bull run from 2008 with crazy all-time-high P/E ratios? That's inflation. We just don't include security prices in CPI because it's not politically expedient to let the poors know they're getting priced out of having a meaningful stake in the economy.

> stock market bull run from 2008 with crazy all-time-high P/E ratios? That's inflation.

No, it isn’t. Your original comment [1] decries people misusing words. Inflation is a measure of real economy price levels. That’s what it means.

We have other words for prices of financial assets: indices. You want to talk about multiple expansion, risk premium compression and easy money in finance. That is fine! Lots of people are intelligently doing so! But they go further by discussing concepts, not muddied nomenclature.

> don't include security prices in CPI because it's not politically expedient to let the poors know they're getting priced out

Or because someone saying inflation is fine because while the price of bread doubled the stock market halved would get shot.

[1] https://news.ycombinator.com/item?id=32254910

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

#206

Post by pm90 »

vuln wrote: post #191
pm90 wrote: post #165

Earlier quoted context omitted.

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.

Millions of jobless migrants crossing the southern border has no affect on labor supply? I also do not understand how "only legal immigration" can have an effect. Immigration is Immigration doesnt really matter the legality of it.

Illegal immigrants can’t participate in vast sections of the economy precisely because of how well immigration checks work. They can only work for the informal sector/low level jobs.

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

#207

Post by boppo1 »

clintonwoo wrote: post #186

It seems from the statement that the fed understands that the inflation is being caused by supply chains and the war in Russia. What I don't get though is how that's considered monetary inflation as opposed to the money supply increasing. I thought that it was just price increases. So the fed mandate is just to ensure that the prices of goods and services barely ever changes even if it means tanking all the markets?

>inflation is being caused by... the war in Russia

The war is in Ukraine and it is not the primary driver of inflation.

https://youtu.be/kOZoamzhfD0

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

#208

Post by lamontcg »

setgree wrote: post #189

Why does the Fed write the way it does? First, this article buries the lede. The first seven sentences are framing. Only sentences 8-9 are actually news. The next four are, again, context. The headline also does not actually say what happened. Second, of the fourteen sentences here, a full six are trivially true -- "The Committee is highly attentive to inflation risks. The Committee seeks to achieve maximum employmen…

"Tell me you were too young to remember Alan Greenspan without telling me that"

The Fed has always shied away from saying things too bluntly, and preferred to deal with wishy washy code words. If it ever says something bluntly you know they really mean it. Something like "softened" is a deliberately ambiguous phrase designed to acknowledge the reality that they're declining without causing panic, by being uncertain and sounding not terribly bad. You're supposed to wonder what that means and argue about it, so the markets don't bolt one way or the other.

If you look up the history of Alan Greenspan ("The Maestro") and the way that investors in 2003 watched for the changes in single words from meeting to meeting from the Fed, so that he never startled the emotionally delicate markets you'll see there's a long history of this kind of language.

Also it kind of scares the crap out of me that they're bumping rates by 75 basis points every meeting. If you understand how much Greenspan was walking on eggshells back in 2003, they're fucking screaming right now by their actions that they're going to plunge the economy into a recession in order to get wage growth and unionization under control.

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

#209

Post by pm90 »

boppo1 wrote: post #197
pm90 wrote: post #180

Earlier quoted context omitted.

Regrettably, This is what does tend to happen. But its also a failure of society because immigrants are easy targets for scoring political points, despite it being repeatedly shown how beneficial immigration has been to Western econonomies.

Can you support that last claim? Might have been good for the S&P, but I'm not so certain the average joe off the street has seen said benefits. I could swear I recently saw a stat that locally born men in the US have only shared in like 3% of new job growth for the last decade or something like that.

Income inequality is a separate (albeit related) problem from economic growth. Immigration generates more value, the fact that most of this value is captured by elites needs to be fixed with appropriate actions (higher taxation on the extremely rich etc).

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

#210

Post by pessimizer »

goatcode wrote: post #148
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…

The sad thing is that individual landlords are among the most responsive to tenant needs, while corporate landlords often are sons of Hell who should be Thanos-snapped out of existence.

You should tell my landlords that, the spoiled son and daughter who inherited a bunch of passive income from their mother (who was actually a great landlord), and who let the leak I could hear, and called them about, fester for over a year until a large chunk fell out of my ceiling.
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