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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

#261

Post by TurkishPoptart »

richbell wrote: post #149
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.

> We need to massively cut corporate taxes, investment taxes, regulations, and all manner of things to increase supply. Supply is low due to a global pandemic disrupting trade (and far too many companies relying on 'just-in-time' logistics). "Massively [cutting] corporate taxes" won't do anything but bolster already soaring corporate profits. A significant amount of that money won't go back into the local economy. It…

How is the "pandemic" still disrupting trade? Wouldn't it be more accurate to say "governments' response to pandemic"? I.e. Shanghai's continued inhumane lockdowns by the CCP for political reasons.

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

#262

Post by ClumsyPilot »

throw_m239339 wrote: post #202
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.

> 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

This is broad to the point of being unhelpfull - an urban resident vs suburban resident, or US vs Japanese lifestyles are quite different.

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

#263

Post by frumper »

kelnos wrote: post #220
enragedcacti wrote: post #166

Earlier quoted context omitted.

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 a…

> Building equity instead of paying rent is a good thing That depends heavily on your goals. I hear this a lot, but it always reads to me like people think equity just magically happens when you buy a home (with a mortgage). No, you have to put money into it monthly, and a portion of that goes to pay of principal, which builds equity. Whether or not putting that money into a large, fixed, illiquid asset (versus stock…

> That depends heavily on your goals. I hear this a lot, but it always reads to me like people think equity just magically happens when you buy a home (with a mortgage). No, you have to put money into it monthly, and a portion of that goes to pay of principal, which builds equity.

I feel like you're missing that you have to put money into a place to live monthly anyway and in the past decade the equity is built up through home value appreciation. My area has been seeing 7-10% increases for quite some time. That equity increase far outstrips what principle I'm paying off.

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

#265

Post by dragonwriter »

nodesocket wrote: post #256
dragonwriter wrote: post #249

Earlier quoted context omitted.

> Now if we can only get states (like California) to stop giving out stimulus payments (they literally calling it inflation stimulus; learn economics 101 California is not giving out anything called stimulus payments. You seem to be referring to the inflation relief tax rebate which is the system that has been adopted to return tax revenue that exceeds the Constitutional cap on state spending (FY 1978-1979 spending a…

You realize the reason California in particular has a budget surplus is because of federal stimulus in addition to their outrageously high tax policies. That aside, why give money straight into people's pocket who will go out and spend it (foolishly) and thus increase inflation? How about, invest in the states infrastructure, address homelessness, work on crime, invest in education, work on wildfires. If after all th…

> You realize the reason California in particular has a budget surplus is because of federal stimulus in addition to their outrageously high tax policies.

California neither increased taxes nor got favoritism in federal stimulus, so that's not why it is doing outstandingly well in fiscal terms. It just manages it's economy better and so has GDP growth that consistently outstrips the national average (usually, it also gets hit harder in the brief GDP drops, but that wasn't the case with COVID—perhaps because California’s GDP is more reliant on remote-compatible work.) See, e.g. https://united-states.reaproject.org/analysis/comparative-tr...

It did cut spending during the COVID downturn, which might have affected surplus numbers, but wouldn't have any impact on revenue overshooting the Gann Limit.

> That aside, why give money straight into people's pocket who will go out and spend it (foolishly) and thus increase inflation?

Because the very slight effect of the redistribution on expected overall inflation is much less than the expected effect it has in mitigating the impact of inflation on lower-to-high-middle income earners, especially lower income.

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

#266

Post by ClumsyPilot »

seibelj wrote: post #58
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 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.

> We need to massively cut corporate taxes

Why would we ever, ever need to cut corporate taxes? If a company re-invensts in equipment, it's workforce, research, or anything at all, they pay no tax. Tax is only applied when they transfer the money to shareholders.

How will enabling corporations to transfer more money to already wealthy shareholders help the economy?

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

#267

Post by option »

ClumsyPilot wrote: post #259
option wrote: post #162

Earlier quoted context omitted.

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.

> Just don’t suggest some type of “communal/socialist” housing. Been there (ussr) - f#*%k that and everything related to it. is this the ususal government=Communal=socialist=communist brain bug? They are totally different things! UK has social housing managed by local government, it's been very succesfull and desirable. Communal apartments are a type of buildding. Community housing might is 'normal' housing run by an…

>> why should someone be 'investing' in newbuild Apartments they won't live in, what value does that bring to the economy?

it funds their construction and land acquisition

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

#268

Post by kelnos »

BitwiseFool wrote: post #83
ParksNet wrote: post #66

Earlier quoted context omitted.

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.

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…

But... why? As productivity levels go up and life expectancy goes up, we should be able to allow people to enjoy retirement more, not less. If we can't do that, then perhaps capitalism is just garbage and we need to find a better way.

Also I do wonder if life expectancy increases are translating directly into the possibility of more "productive years". I wouldn't be surprised if some of the life expectancy increase is due to medical procedures that extend life at the expense of quality of life. People in these situations wouldn't be working anyway.

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

#269

Post by al_mandi »

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.

Didn't they deal with interest during those periods that caused the long recessions you're talking about? I think we're seeing a pattern here.

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

#270

Post by staticman2 »

setgree wrote: post #233
staticman2 wrote: post #218

Earlier quoted context omitted.

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?

Here's an example of what I mean. The article states "The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run."

Someone on this thread stated the interests rates are actually being raised because the committee seeks to crush unions.

So if that "obvious" sentence was removed I'd only be hearing one side of the story if I read the poster's take and the attached press release.

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