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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

#231

Post by nickpp »

credit_guy wrote: post #230
nickpp wrote: post #229

Earlier quoted context omitted.

55" 4K TVs used to be very expensive as well. Now they are so cheap and thin and good I hug one in my basement just for the occasional workout video streamed from YouTube. Technological progress is the secret to price reduction. No government interaction required or even wanted, it's usually much more likely to create problems...

> No government interaction required or even wanted, it's usually much more likely to create problems... That's generally true, but there are exceptions. Solar panels are very cheap now because of decades of government subsidies. Battery electric vehicles are still more expensive than their regular counterparts, but certainly one day they'll be cheaper (they have many more fewer moving parts). But would they have cau…

Actually solar panels are very cheap now because the technology used to produce them (the same tech used to produce CPUs and chips and such) has become incredibly cheap due to the widespread high-tech adoption.

Same amazing price reductions with li-ion batteries which are used in every mobile device. EVs? Who knows - but since the government is subsidizing gas prices, that market is already corrupted beyond salvation.

Governmental subsidies managed to skew demand and create market aberrations like the rainy Germany covered in solar panels while their nuclear sector was being closed.

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

#232

Post by HelloMcFly »

marcusverus wrote: post #156
HelloMcFly wrote: post #93

Earlier quoted context omitted.

This is an honest question borne of ignorance: in what ways does that matter? I'm sure it does, but people over there are employed, they have a larger safety net, more accessible healthcare access AND better outcomes, seemingly less crime, education seems to be something of a wash (though there is so much variability in the US it's almost a waste of time to do a nation-to-nation comparison). I only know the major bul…

This seems like a very hand-wavy comparison. By the numbers, the difference is enormous--Japan's average household net-adjusted disposable income per capita is $28,900. For direct comparison, the USA's average is 77% higher than Japan's at $51,100. Japan's average is even below the OECD average (which includes a mix of leading Western countries and less developed countries like Costa Rica and and Hungary) by 5%. [0]…

> This seems like a very hand-wavy comparison.

That's a pretty ungenerous response when I was asking in good faith to understand, even expressing my own ignorance. I only know people that hold dual citizenship, and their experience of Japan certainly isn't some big step down from the US.

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

#233

Post by nine_zeros »

junofan wrote: post #227
nine_zeros wrote: post #221

Earlier quoted context omitted.

> How is subsidizing food producers any different than giving everyone money to buy food? Subsidizing production by incentivizing number of units is different from just creating demand and waiting for producers to match up. By incentivizing number of units of production, say x% incentive for per 1000 bushels of corn AFTER 10k bushels, you are literally incentivizing production of food and suppressing prices. You are…

You’re talking about a how a centrally planned economy can in theory overcome market failure. > Just incentivize builders to build 2 million units within a year with fiscal policy and bam, inflation is gone. Why fiscal policy and not zoning laws or something? Why would giving money to developers lead to zero inflation?

> Why fiscal policy and not zoning laws or something? Why would giving money to developers lead to zero inflation?

The fiscal policy is meant to be a one-time, short term boost to the exact items that is causing CPI to go higher. The fiscal policy is meant to be timeboxed. A zoning law is a much more long term thing.

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

#234

Post by maerF0x0 »

jazzkingrt wrote: post #225
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?

One reason is that inflation has a lot of inertia, because inflationary expectations drive more inflation. A strong labor market drives up wages. When not matched by GDP growth, those wages increase costs, which cause workers to demand higher wages to keep up with those costs, and so on. The cycle needs to be broken even if there is short term pain for workers.

But what about the decades of wages not keeping up with productivity (proxy for GDP Growth)? Could this simply be seen as workers finally getting their due?

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

#235

Post by hot_gril »

afpx wrote: post #220
hot_gril wrote: post #65

Earlier quoted context omitted.

The Fed creates money, which nothing else can do. Of course the money supply has its own ebb and flow from private banks and such offering loans, but it's hard to ignore M2 doubling every 10 years.

I've only been alive since the 70s. What was life like before the Fed created money? Was it better?

Life was different for unrelated reasons. Fed money creation is effectively a tax on anyone holding dollars. Unfair as it is, it's not life-altering.

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

#236

Post by paulpauper »

rustybelt wrote: post #30
jollyllama wrote: post #23

Earlier quoted context omitted.

>How much is our entire culture the result of cheap money? Only the parts involving housing, education, transportation, employment, and investments.

Healthcare too. Cheap debt and outsized investment returns have been keeping health systems fat for years.

you have to take into account individual preferences and quality of care. Many countires which have cheaper healthcare either it's ignoring private care coexisting with public , taxes (people with universal care opting for private care but still having to pay higher taxes for universal care, which seems really unfair)
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