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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

#231

Post by richbell »

badtoro wrote: post #223
seibelj wrote: post #58

Earlier quoted context omitted.

It's almost like you are encouraging supply side economics... aka... trickle down We need to massively cut corporate taxes, investment taxes, regulations, and all manner of things to increase supply. The government has been attacking business for so long we are in quite the hole.

Judging from the downvotes you get the level of understanding of 101 economics among the HN audience remains precariously low :-)

Or people simply disagree with it. Economics is a Social Science and largely based on opinion, not fundamental properties of the universe.

Racism is defined in many academic circles as "prejudice plus power". Are people 'wrong' if they disagree and think it ought to be defined differently?

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

#232

Post by kingrazor »

highwaylights wrote: post #147
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…

> if the population is growing It isn’t.

Population growth, in the US at least, has not yet hit negative: https://www.census.gov/library/stories/2021/12/us-population...

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

#233

Post by setgree »

staticman2 wrote: post #218
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…

Second, of the fourteen sentences here, a full six are trivially true None of those things are trivially true to people who regularly post contrarian and/or conspiracy theory takes about the fed on this very web site. It makes sense for the fed to restate these "trivial" matters rather than ceding the discussion to "alternative" facts spread by contrarians.

I meant that they are trivially true in the sense that they, e.g.,

* restate the fed's mandate to keep to full employment

* say that the fed will consult many sources when it makes its verdicts (I should hope so!!)

* say that their verdict might change if they get new input or new guidance

Surely even a true dissident on monetary matters would still acknowledge that the fed's mandate says what it says?

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

#234

Post by boppo1 »

colinmhayes wrote: post #188
balozi wrote: post #153

Considering The Fed's abysmal track record, I fear the only outcome of this is more boom and bust cycles. Maybe we would be better off without Fed and Treasury intervention.

The fed and it’s macroeconomic policy is one of the biggest reasons for economic growth in the post world war 2 era. Obviously they’re not perfect, but they’re the main reason we don’t have 40 year recessions anymore like we did in the 19th century.

Can you support this? Could it be that their policy was bad but even bad policy couldn't stop the US, which spent WW2 turning into a manufacturing powerhouse while all its competition was getting leveled from the sky?

Maybe the production of useful goods and services lead to wealth, not policies formed by comittee.

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

#235

Post by misiti3780 »

tdhz77 wrote: post #52
UncleOxidant wrote: post #31

Still a very low rate by historic standards. We've got a ways to go.

It was about 6.5% in the 1998 recession and 5.25% in the 2007 great recession. It's unlikely we will head into a recession anytime soon. Numbers are all over the place, but I see most of it as temporary (Covid, Gas Prices) and not structural or risky behavior from investment banks in 2007. Remind me if I'm wrong, but I think inflation will drastically drop next report.

"It's unlikely we will head into a recession anytime soon."

We are in a recession now, what are you talking about? Lets revisit this comment tomorrow.

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

#236

Post by bluedino »

mint2 wrote: post #156
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 isn’t a shortage of many items that have had large price increases like oreos. There is no shortage on a lot of items but the companies see opportunity to raise prices at will in the current climate simply because they can

Why have Oreo skyrocketed in price, but not Rice-a-roni or Animal Crackers?

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

#237

Post by pkaye »

nodesocket wrote: post #151
01100011 wrote: post #130

Earlier quoted context omitted.

> California is only giving it to lower income citizens. Not last time I checked. I work at a FANG and am definitely not low income yet my wife and I will be getting a few hundred.

Thanks for dispelling all these myths, the California inflation checks are indeed going out to single and married people with very high annual income. If you don’t think this is to help keep politician’s in office (Gavin) you aren’t paying attention and being naive.

Quite a few states are doing this btw.

https://www.cnet.com/personal-finance/taxes/state-stimulus-c...

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

#238

Post by icedchai »

laweijfmvo wrote: post #129
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…

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…

Asset inflation is certainly a thing. If people weren't convinced by the stock market's rise from the end of the financial crisis (~2009) through ~2019 to save and invest, what would convince them?

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

#239

Post by piperswe »

boppo1 wrote: post #221
bjt wrote: post #131

Earlier quoted context omitted.

The Federal Reserve doesn't print money. The Treasury does that. The Fed does two things: 1. They lend money to banks through what's called their "discount window". https://en.wikipedia.org/wiki/Discount_window 2. They buy and sell US Treasury Bonds on the open market until interest rates hit the target that they've set. https://en.wikipedia.org/wiki/Federal_Open_Market_Committee Today's announcement is about using t…

"print money" is a colloquialism for increasing the money supply, which the Fed does do. Before you argue that all banks increase the money supply: there is a limit to the maximum possible amount of money as long as the reserve ratio isn't 0. That maximum limit was raised by the Fed with bond buying. When people complain about printing money, this is what they are complaining about. It absolutely causes asset inflati…

Reserve requirement ratios are currently 0: https://www.federalreserve.gov/monetarypolicy/reservereq.htm

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

#240

Post by boppo1 »

unethical_ban wrote: post #51
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.

The student debt issue is a complicated one that we shouldn't want to recreate, but I don't see how debt forgiveness on education is nonsense.

The crisis is in part because of high uni prices. Giving everyone federally guaranteed loans killed price discovery for higher education. Forgive the loans without adding the possibility of bankruptcy to future loans (and forcing unis to cosign a significant fraction) and you'll just see prices skyrocket further.
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