51–60 of 236 posts
On a related note, since mid-April, the Fed has withdrawn –$140B of liquidity from the financial system: https://news.ycombinator.com/item?id=32929454 and earlier this year announced that it plans to continue withdrawing liquidity from the financial system at the rate of $90B/month for the foreseeable future. The innocuous term for these withdrawals is "quantitative tightening." There are no historical precedents for…
I haven't seen any reporting on how the recent and huge amounts of QE might factor into all of this. In my primate mind, wouldn't ongoing QE curb the impact of rising interest rates on inflation?
Given that mortgage rates recently rose past 6%, seems to me this latest rate increase is going to put strong pressure on house prices. The rate has a huge impact on the monthly payment required to service a loan, more so than is immediately apparent without doing the math.
People keep hoping or expecting this, yet prices keep going up. As long as wages for top earners keep rising, so will demand in expensive areas. Also, real estate did well in the 90s despite high interest rates, too.
I'll echo what some folks have said in other threads, we've had rates down near zero for fifteen years, and we've got to get them back somewhere near historic normals at some point. If only so they can be cut again during the next crisis. How much is our entire culture the result of cheap money?
Money-"printing" creates the need to stash money away, which leads to passive investing since most people who have savings aren't market experts, which leads to perpetual bubbles. There's no option to simply hold money. This investment at least tends to go into profitable things like stocks, but not in a proportionate way. It hardly matters how profitable a company is; you just expect the stock to go up regardless be…
Ow, my 3x leveraged ETFs aren't looking so good.
I'll echo what some folks have said in other threads, we've had rates down near zero for fifteen years, and we've got to get them back somewhere near historic normals at some point. If only so they can be cut again during the next crisis. How much is our entire culture the result of cheap money?
A substantial chunk of the tech industry are speculative zombie companies that are built on the edifice of zero interest.
What it will do is rise i interest payments on the US sovereign debt very significantly.
The US has two options, as far as I can tell.
1. Slash govt. spending (entitlements and defense) and rise taxes on the laptop class (that's us folks!)
2. Accept structural inflation and high interest rates.
The Dollar dominance is coming to an end, we weaponized it too much, so option 3, exporting inflation is out.
Politically 2 is easier, but in the long run disastrous.
Given that mortgage rates recently rose past 6%, seems to me this latest rate increase is going to put strong pressure on house prices. The rate has a huge impact on the monthly payment required to service a loan, more so than is immediately apparent without doing the math.
Given that mortgage rates recently rose past 6%, seems to me this latest rate increase is going to put strong pressure on house prices. The rate has a huge impact on the monthly payment required to service a loan, more so than is immediately apparent without doing the math. People keep hoping or expecting this, yet prices keep going up. As long as wages for top earners keep rising, so will demand in expensive areas.…
I'll echo what some folks have said in other threads, we've had rates down near zero for fifteen years, and we've got to get them back somewhere near historic normals at some point. If only so they can be cut again during the next crisis. How much is our entire culture the result of cheap money?
A substantial chunk of the tech industry are speculative zombie companies that are built on the edifice of zero interest.
The hope is that everyone is going to march in line and not go out asking for raises due to inflation; so that we end up with "hyper-inflation" before the supply chain system stabilizes, maybe the Russo-Ukraine conflict sees some light, and the U.S. Treasury can decide they can't sustain this any longer.
Thus, we are praying for all these pieces to kinda fall into place, so we don't end up with hyper-inflation, recession and interest rates going down all at the same time.
P.S. You can follow the target to actual rates here https://www.newyorkfed.org/markets/desk-operations/reverse-r...
Click All to see the difference in scale we are talking about to the past. 2 Trillions are parked to the Fed by banks, accumulating the new high interest, waiting for a signal to be re-enter.
I'll echo what some folks have said in other threads, we've had rates down near zero for fifteen years, and we've got to get them back somewhere near historic normals at some point. If only so they can be cut again during the next crisis. How much is our entire culture the result of cheap money?