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Fed hikes rates as inflation worries push up bond yields

reuters.com

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Re: Fed hikes rates as inflation worries push up bond yields

#111

Post by iamnothere »

jrflo wrote: post #21
iamnothere wrote: post #9

Earlier quoted context omitted.

Higher rates means financing/borrowing is more expensive. Mortgage rates will go up, possibly pushing home prices down. This is neutral for buyers because of higher rates, but bad for sellers. Loans (personal or business) will be harder to come by. Layoffs, or at least hiring freezes, are more likely. Companies will move into a defensive rather than an growth mode. Higher unemployment will lead to more desperation, a…

Home prices are sticky on the way down, 25 basis points won't change much

Supply is way up and sales are way down, on average: https://wolfstreet.com/2026/09/10/sales-of-existing-single-f...

This could be the catalyst to lower prices if sellers get spooked, especially if gas prices keep going up.

Re: Fed hikes rates as inflation worries push up bond yields

#112

Post by owebmaster »

jameslk wrote: post #104
matteoraso wrote: post #97

Earlier quoted context omitted.

And which party controls congress? I'll give you a hint: It's the party that spent decades advocating for irresponsible tax cuts without cutting spending[0]. [0] Yes, I know that the Republicans said that they were going to cut spending to match the tax cuts, but that never ends up happening.

The high inflation since Covid and $40 trillion in debt didn’t happen under one party

But just one wins elections promising they will reducing it

Re: Fed hikes rates as inflation worries push up bond yields

#113

Post by im_down_w_otp »

Analemma_ wrote: post #101
im_down_w_otp wrote: post #55

It bugs me that the Fed has no mechanism to really deal with supply-shock driven inflation. Prices are shooting up, but not strongly correlated to money supply at the moment. They’re shooting up because there are a dozen or more entirely capricious and totally self-inflicted supply-shocks due to bizzaro tariff “policy”, disastrous military adventurism, and general erosion of the USD the prime vessel for international…

> It bugs me that the Fed has no mechanism to really deal with supply-shock driven inflation. I mean, what would that actually look like? The Fed is insulated from democratic accountability, for very good reasons, but flipside of that is that their powers are intentionally limited. If they had the same immunity to public opinion but with the power to address supply shocks, that would quickly veer into tyranny. It's a…

What it would look like, at the barest minimum, would be the Fed rightly and with receipts calling out the fact that they’re a monetary policy function, and that the current inflationary problems aren’t a monetary one, so if the U.S. would like something done about its inflation issues, then it needs to look someplace else besides the Fed to deal with it.

It doesn’t have to do anything to monetary policy when monetary policy isn’t the problem. It can do nothing.

It’s not the Fed’s job to try to fix terrible fiscal & trade policy, but that’s now what it’s basically trying to do. So, it’s become a political function by virtue of the political apparatus offloading the consequences of its idiocy onto the Fed to clean up after it with a set of tools that can’t even actually do the job.

Re: Fed hikes rates as inflation worries push up bond yields

#114

Post by JMiao »

adventured wrote: post #33
andy_ppp wrote: post #23

So, during the Great Depression who ended up doing well? What can be applied to today?

There isn't going to be a great depression. The US is going to debase itself endlessly through spend-print-spend-print. At some point they may load up enough debt that the economy suffers a gradual heat death, in the style of Japan, wherein too much of your national capital is going to debt maintenance, sitting in a low yield blackhole sucking the dynamism out of your system (instead of going to productive use, busin…

i know what you mean. 2008 and covid taught me to stop underestimating the abilities/nerve of our financial schemers and their political representatives to kick the can down the road. but i am too anxious about it to think straight. what to do?

Re: Fed hikes rates as inflation worries push up bond yields

#115

Post by debo_ »

im_down_w_otp wrote: post #55

It bugs me that the Fed has no mechanism to really deal with supply-shock driven inflation. Prices are shooting up, but not strongly correlated to money supply at the moment. They’re shooting up because there are a dozen or more entirely capricious and totally self-inflicted supply-shocks due to bizzaro tariff “policy”, disastrous military adventurism, and general erosion of the USD the prime vessel for international…

Additionally, immense government spending is offsetting anything the Fed can do, whereas in now-ancient times they tended to cooperate better.

Re: Fed hikes rates as inflation worries push up bond yields

#116

Post by bluGill »

iamflimflam1 wrote: post #77
tossandthrow wrote: post #25

Earlier quoted context omitted.

Neutral for buyers? Absolutely not. As a buyer you rather want to take out a loan in a high interest rate environment than a low interest rate environment, given that the monthly payment is the same. 1000 usd extra paid towards your mortgage actually makes a difference when the rate is 15% compared to when it is 1.5%

This really doesn’t make sense. Higher interest rates mean the monthly payment is higher. You need to pay back the principal + the interest.

He assumed that the payment is the same meaning the principal for the same house went down and so this is neutral. If your payment is the same it doesn't matter what is principal vs interest. In the best cases rates go down in the future and then you refinance and your payment goes way down.

House prices tend to be "sticky", so that assumption is probably wrong. People who own a house often cannot afford to sell for the current value since it won't pay off their loan and leave enough money left over for a replacement house so they avoid moving. Eventually things get bad enough that they "sell short", but that takes a credit hit so you don't want to do that until the loss is large (and in turn you gain more).

Re: Fed hikes rates as inflation worries push up bond yields

#117

Post by jameslk »

owebmaster wrote: post #112
jameslk wrote: post #104

Earlier quoted context omitted.

The high inflation since Covid and $40 trillion in debt didn’t happen under one party

But just one wins elections promising they will reducing it

Neither party has realistic plans to reduce the debt. It’s been that way for decades. Kicking the can down the road gets more votes

Re: Fed hikes rates as inflation worries push up bond yields

#118

Post by chucksta »

owebmaster wrote: post #112
jameslk wrote: post #104

Earlier quoted context omitted.

The high inflation since Covid and $40 trillion in debt didn’t happen under one party

But just one wins elections promising they will reducing it

What's the other promising to do with it?

Re: Fed hikes rates as inflation worries push up bond yields

#119

Post by hsbalanxvxjsmab »

ThunderSizzle wrote: post #58
kadoban wrote: post #7

Earlier quoted context omitted.

Inflation is high, so interest rates need to go up to try to slow that, but the economy isn't doing amazing already, and higher interest rates won't help that. Not to mention the US debt is _high_ as hell and bond yields mean that's more expensive. And the country is run by a broken fool who has no interest or ability to fix any of that.

The country has been _run_ by fools for 26 years. Congress has had 26 years to do something about the fiscal situation, and we've had four presidents, and the fiscal responsible side of the electorate is never listened to. Both sides are to blame - neither will fix the problem. Obama could've made that his goal - he was competent, had a lot of political good will, and many people were frustrated at the bailout policy…

I would love to hear what was "radical" or "divisive" about Obama's policy. A significant portion of the country disliking him because of his skin color doesn't make his policies "radical"

Re: Fed hikes rates as inflation worries push up bond yields

#120

Post by AnimalMuppet »

TheJoeMan wrote: post #74
andy_ppp wrote: post #23

So, during the Great Depression who ended up doing well? What can be applied to today?

Unfortunately, during that time is when they screwed around with the gold confiscations. So the best option would have been to illegally hoard gold until they struck the statute down?

Oof. Private gold ownership was illegal until 1975. So, you have to hide it for 40+ years? That investment strategy has some significant downsides...
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