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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

#131

Post by matteoraso »

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

I'm a lot more sympathetic to Joe Biden temporarily causing a spike in inflation while helping America recover from a horrible pandemic than Republicans habitually running the country off of debt.

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

#132

Post by UncleOxidant »

dabinat wrote: post #27

Prediction: this causes a recession in two years, right after a Democrat wins the White House, who will be blamed for it. The economy will turn around after a few years, just in time for a Republican to win and claim they fixed it. This is how Republicans have a reputation for being economically savvy despite actual evidence to the contrary, because the general population doesn’t understand that economics runs on a t…

> Prediction: this causes a recession in two years

"this" (raising the fed rate by .25%) is not what causes a recession in 2 years, it's what led to "this" (the ill-advised, badly-planned, Iran war) + tariffs + popping AI bubble that will do that.

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

#133

Post by UncleOxidant »

jameslk wrote: post #57
dabinat wrote: post #27

Prediction: this causes a recession in two years, right after a Democrat wins the White House, who will be blamed for it. The economy will turn around after a few years, just in time for a Republican to win and claim they fixed it. This is how Republicans have a reputation for being economically savvy despite actual evidence to the contrary, because the general population doesn’t understand that economics runs on a t…

Both parties are responsible for the inflation and debt. Fiscal policy is largely driven by congress, not the president

This president single-handedly raised tariffs on goods from all over the world.

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

#134

Post by jrflo »

iamnothere wrote: post #111
jrflo wrote: post #21

Earlier quoted context omitted.

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.

Your graph shows that home sales have been at a constant rate for the last 3 years. They are way down from 2020-2021, when covid plus low interest rates caused a home buying frenzy, but this is not new. We've been in this regime for the last 4ish years, 25 basis points is not going to change anything. In fact, interest rates are lower now than they were a year ago.

That's not to say that rising rates aren't a sign of bad things, the definitely are, it's just not going to make much of an impact with this magnitude of change.

https://fred.stlouisfed.org/series/fedfunds

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

#135

Post by UncleOxidant »

AnimalMuppet wrote: post #102
dabinat wrote: post #27

Prediction: this causes a recession in two years, right after a Democrat wins the White House, who will be blamed for it. The economy will turn around after a few years, just in time for a Republican to win and claim they fixed it. This is how Republicans have a reputation for being economically savvy despite actual evidence to the contrary, because the general population doesn’t understand that economics runs on a t…

But not doing this would, in two years, cause (or at least allow) inflation that would cause harm, too. But Trump might get blamed in that case, because inflation would increase for the next two years, and so people would experience the pain during his term.

But this being supply shock induced inflation means that raising rates will likely have little effect on lowering inflation.

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

#136

Post by lenerdenator »

ojbyrne wrote: post #28
lenerdenator wrote: post #10

Should have been this high years ago. The country - particularly this industry, information technology - got addicted to cheap cash. Worse, people didn't want to pay any of it back in tax, so bond yields are going to go up on the debt that was issued to cover deficit spending. Should be interesting to see how this impacts the AI hyper-scalers. They were already burning through cash like a furnace and were running out…

"years ago" seems like the wrong criticism. Today's rate is lower than the rates from December 2022-October 2025. That seems like years ago.

Let's say pre-COVID.

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

#137

Post by jameslk »

UncleOxidant wrote: post #133
jameslk wrote: post #57

Earlier quoted context omitted.

Both parties are responsible for the inflation and debt. Fiscal policy is largely driven by congress, not the president

This president single-handedly raised tariffs on goods from all over the world.

High inflation and large debt preceded the tariffs. That said, the tariffs didn’t help either. That’s why I said largely

Ultimately the president is enabled or constrained by laws enacted by congress

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

#138

Post by HWR_14 »

Scottn1 wrote: post #66
dabinat wrote: post #27

Prediction: this causes a recession in two years, right after a Democrat wins the White House, who will be blamed for it. The economy will turn around after a few years, just in time for a Republican to win and claim they fixed it. This is how Republicans have a reputation for being economically savvy despite actual evidence to the contrary, because the general population doesn’t understand that economics runs on a t…

At what point into a presidential term does it become their actual mess? And is there evidence of a time delay? Because by that argument, the mess we are in would been caused by Democrats.

There's not a constant cutoff. It depends a lot on what the president and the administration do. Does the president push the button and start nuclear war? They are the primary driver for the new economy. Does the president continue the same policies that were working for the last decade and continue to work for the length of their presidency? They might never be the primary driver.

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

#139

Post by jameslk »

matteoraso wrote: post #131
jameslk wrote: post #104

Earlier quoted context omitted.

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

I'm a lot more sympathetic to Joe Biden temporarily causing a spike in inflation while helping America recover from a horrible pandemic than Republicans habitually running the country off of debt.

Joe Biden didn’t cause a spike in inflation, congress did. And the policies that caused it wasn’t under Joe Biden’s term

Also, inflation wasn’t temporary

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

#140

Post by AnimalMuppet »

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…

Why specifically 26 years? I agree that Congress has been increasingly useless, leading to more and more rule by presidential decree in order to have a government that runs at all, but there wasn't a step function 26 years ago.
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