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Federal Reserve to increase interest rates by 75 basis points for the third time

federalreserve.gov

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Re: Federal Reserve to increase interest rates by 75 basis points for the third time

#191

Post by leotravis10 »

Ken Klippenstein's great report over at The Intercept that even the Fed’s own research warns that continuous interest rate increases could trigger a “deep recession”. https://theintercept.com/2022/09/09/recession-federal-reserv...

I can predict that next time around the Fed is going to trigger a full 100 percentage rate increase thus triggering a much deeper recession thus more layoffs and job losses as a result. It's by design really since even the Fed wants to get wages down and shift power back to the employer.

Buckle up.

Re: Federal Reserve to increase interest rates by 75 basis points for the third time

#192

Post by majormunky »

maerF0x0 wrote: post #149

Anyone else notice Powell mentioned multiple times that they're trying to weaken the labor market? (and by extension the ability of workers to negotiate good wages, good conditions) Anyone know why?

Workers making good wages increases demand on goods that are already in high demand.

Re: Federal Reserve to increase interest rates by 75 basis points for the third time

#193

Post by bombcar »

toast0 wrote: post #186
bombcar wrote: post #103

Earlier quoted context omitted.

Correct, however there are costs associated with refinancing (either "built in" or upfront) and in some cases the refinanced loan has fewer protections. For example, a purchase loan in California is non-recourse, but a refinance is not. However, you can get "trapped" as I did if you bought near a high point, and then interest rates and prices dropped, and since I was now "underwater" I couldn't refinance, even though…

> For example, a purchase loan in California is non-recourse, but a refinance is not. That's not the case for refinances after Jan 1, 2013.

Good to know!

https://www.bankruptcysoapbox.com/california-extends-protect...

Re: Federal Reserve to increase interest rates by 75 basis points for the third time

#194

Post by mattmoose21 »

WalterBright wrote: post #175
adgjlsfhk1 wrote: post #160

Earlier quoted context omitted.

One advantage of smart glass is you can get much better wavelength control. For example, you can reflect 90% of infrared light while letting through the visible light. This is really hard to do with a curtain.

If it's not worth the money for people to pay to get this feature, it is not worth paying for it with taxes. I've seen smart glass demoed at a home show 25 years ago. I thought it was way cool, until they quoted the price. It's no surprise it hasn't gotten any traction since. Oh, it also consumed electric power when in dark mode, as much as a light bulb. It's not a passive system. Window blinds, louvers, eyebrows, sh…

Would this product be aimed more at businesses and high-rises? Also this seems a bit more aesthetically pleasing than the alternatives and especially newspaper.

Re: Federal Reserve to increase interest rates by 75 basis points for the third time

#195

Post by tuatoru »

nine_zeros wrote: post #128
fny wrote: post #82

Earlier quoted context omitted.

I'll mention something that most people are forgetting. The Fed was forced to cut rates to zero for a long time because fiscal policy was not stimulative enough. Rates are a shitty stimulative tool. Here's Bernanke in 2012: https://www.theatlantic.com/business/archive/2012/12/ben-ber... Low rates help people with money borrow more cheaply, accrue more wealth, and kick bankruptcy cans down the road indefinitely. It al…

> The Fed was forced to cut rates to zero for a long time because fiscal policy was not stimulative enough. It's not just fiscal stimulus but "how" the stimulus was applied. It's not like the government isn't spending enough. It is spending. Until recently, all the spending went on tax credits and military. What we need is fiscal stimulus in industries of the future. Only the current administration gets it and made i…

Oh, I think there's enough to do in "legacy" areas: roads, bridges, ports and airports, water supplies, electricity transmission grids, and so on. Also flood control measures and drought and wildfire mitigation.

Your industries of the future won't operate well if the basics aren't kept up.

Re: Federal Reserve to increase interest rates by 75 basis points for the third time

#196

Post by JamesBarney »

greatpostman wrote: post #95
JamesBarney wrote: post #60

Earlier quoted context omitted.

People get this backwards all the time. The fed did not cause cheap money, an aging population, sovereign wealth funds, and increasing inequality caused cheap money. The fed just responds by setting the interest rate to appropriately set the interest rate so we have full employment.

This is an insane assertion. The fed has made consistent huge mistakes in monetary policy. No serious investor or public financial figure thinks these cheap rates were necessary

Lots of people who wished the natural interest rate was lower liked to blame the Fed instead of fundamentals. But if the Fed has set the interest rates too low we would have had runway inflation from an overheating economy instead of a low prime age employment % (which suggests the interest rates were too high).

Re: Federal Reserve to increase interest rates by 75 basis points for the third time

#197

Post by jnwatson »

sbaiddn wrote: post #57

This wont help inflation, interest rates are still effectively negative when inflation is considered. 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 i…

Raising interest rates makes the dollar more attractive relative to other currencies, because receiving more interest is better than receiving less.

Re: Federal Reserve to increase interest rates by 75 basis points for the third time

#198

Post by WalterBright »

mattmoose21 wrote: post #194
WalterBright wrote: post #175

Earlier quoted context omitted.

If it's not worth the money for people to pay to get this feature, it is not worth paying for it with taxes. I've seen smart glass demoed at a home show 25 years ago. I thought it was way cool, until they quoted the price. It's no surprise it hasn't gotten any traction since. Oh, it also consumed electric power when in dark mode, as much as a light bulb. It's not a passive system. Window blinds, louvers, eyebrows, sh…

Would this product be aimed more at businesses and high-rises? Also this seems a bit more aesthetically pleasing than the alternatives and especially newspaper.

Just pointing out how cheap solutions can be.

Re: Federal Reserve to increase interest rates by 75 basis points for the third time

#199

Post by qeternity »

andrekandre wrote: post #133
qeternity wrote: post #105

Earlier quoted context omitted.

I agree with your sentiment but this isn’t true, in fact for most of the Fed’s life it was not the primary creator of money. Fractional reserve banking (which, by definition, the Fed is) creates money. If I deposit $1,000 into my local bank, and they turn around and lend $900 of that back out, that creates money.

> If I deposit $1,000 into my local bank, and they turn around and lend $900 of that back out, that creates money im kind of ignorant so please forgive if this is not correct, but i've heard its not necessarily "creating" money since its (the 900 dollars) all on the balance sheets as liabilities?

Money supply is not a fixed constant, it never has been.

But under your argument, then the Fed doesn’t technically create money either. It lends money like any other bank. Now this money is created out of thin air, but in theory it’s eventually repaid.

Re: Federal Reserve to increase interest rates by 75 basis points for the third time

#200

Post by qeternity »

MichaelConlon wrote: post #163
andrekandre wrote: post #133

Earlier quoted context omitted.

> If I deposit $1,000 into my local bank, and they turn around and lend $900 of that back out, that creates money im kind of ignorant so please forgive if this is not correct, but i've heard its not necessarily "creating" money since its (the 900 dollars) all on the balance sheets as liabilities?

While it is not technically "creating" new money it is expanding the supply of money (credit) in the economy. In the above example you still have $1000 owed to you and the company/person receiving that loan now has $900. That's a total of $1900 of "real" money generated from your $1000 deposit. The balance sheets net out to zero but there is in effect an extra $900 now in the economy.

You’re splitting hairs that can’t be split. Increasing the money supply is creating new money.

Money is created and destroyed all the time.

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