Fed hikes rates as inflation worries push up bond yields • Hacker News Board

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

#191

Post by hsbalanxvxjsmab » Thu, Sep 17, 2026, 2:30 AM UTC

aftbit wrote: post #158

hsbalanxvxjsmab wrote: post #119

Earlier quoted context omitted.

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"

A universal health care mandate were both radical and divisive, and the popular nickname for the ACA today is "Obamacare". I happen to think the policy was a good idea, and voting to keep it in play was the best vote of John McCain's career ... but it was definitely both radical and divisive. Now, much of the "mandate" has been stripped away, health care remains a mess, and access is far from affordable, but you can'…

Lol cool so health care is your definition of "radical" and "decisive". Hint: it's neither of these things and the only reason it was considered as such was because Obama was black (see tan suit). Seems like we need a few more years of woke cause you still can't see the obvious

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

#192

Post by jameslk » Thu, Sep 17, 2026, 2:30 AM UTC

sbohacek wrote: post #176

jameslk wrote: post #146

Earlier quoted context omitted.

> The (vast?) majority of the debt happened as the result of the Republican party both increasing spending and cutting taxes every time it lands someone in the White House and before midterms flip the House back to Democrats. Both parties have run an increasing deficit, with the only outlier being a small amount of time in the late 90s. The deficit is largely caused by social security outlays, medicare/medicaid outla…

Maybe you mean something different, but not every recent president has "run an increasing deficit" Reagan: +74B Bush: +103B Clinton: -382B Bush: +1.5T Obama: -747B Trump: +2.1T Biden: -1T Where change in deficit is the final budget deficit - starting budget deficit So, every Republican president runs an increasing deficit and every Democrat president runs a decreasing deficit.

Congress is the one that largely makes the fiscal policy choices. For example, during Clinton’s second term when the deficit was almost eliminated (some claim there was a surplus, but there wasn’t because of social security liabilities), you had a republican controlled congress who were pushing for cuts and fiscal tightening:

https://en.wikipedia.org/wiki/Contract_with_America

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

#193

Post by esalman » Thu, Sep 17, 2026, 2:43 AM UTC

carefree-bob wrote: post #190

esalman wrote: post #189

Earlier quoted context omitted.

I don't think numbers matter here. Bond prices shooting up is a result of market losing trust in US, or it's ability to not default. Dollar is famous backed by $700T military. But the world has seen how it failed to secure a strait. The current US government has broken all kind of promises. I want to highlight two in particular - free trade and immigration. World economy has benefited for decades on the promises of f…

The dollar is not "backed" by a military. China has a huge military and no one uses the Yuan for third party trade. Why not? Because China does not run trade deficits that allow third parties to acquire the Yuan in the first place, it does not have open capital markets that allow third parties to store their surpluses in Yuan, and it does not have the investor protections that give investors confidence that they can…

Your points are valid. But there's a reason why dollar is "petrodollar" - when we say it's backed by US military it's really the axis of US-Israel-Saudi Arabia which control military as well as resources. People use US dollar not necessarily because they want, but because they have to. I also do not know who Graber is but I'll look it up.

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

#194

Post by rayiner » Thu, Sep 17, 2026, 2:45 AM UTC

what wrote: post #185

rayiner wrote: post #165

Earlier quoted context omitted.

Our budget deficit is $2 trillion. To close it, you need to significantly raise taxes on the fattest part of the income curve, which is the top 25%. They have $10 trillion of income. https://taxfoundation.org/data/all/federal/latest-federal-in... . An across the board 200 basis point increase would close the deficit. That would raise their taxes to 38% at the low end to 46% at the high end, which is perfectly fine. T…

> taking half of someone’s money is totally fine Okay. Then let’s also reduce what’s spent welfare/benefits by a similar amount, at least we’re not taking money they worked for.

No, U.S. benefits are at a typical level for an OECD country. The problem is the taxes. U.S. taxation is only 25% of GDP, versus 40% in western Europe. We could raise taxes $3 trillion annually and still be at the level of one of the more responsible European countries like the U.K.

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

#195

Post by rich_sasha » Thu, Sep 17, 2026, 2:51 AM UTC

smackeyacky wrote: post #167

carefree-bob wrote: post #163

Earlier quoted context omitted.

Central banks didn't use to do this, in the post-war period up until about 1980, they tried targeting the monetary aggregates like M2. Unfortunately they discovered that the size of monetary aggregates was outside the control of central banks, these were demand determined by the public's desire for money balances. So all attempts to control the growth of monetary aggregates failed. Having an inability to control anyt…

I don’t think we have a wide enough Overton window when it comes to economic discussions, the neoliberal revolution of the 1970s killed a lot of little levers of economic control in most post social democratic countries. Instead we were promised a new age of free trade and economic liberalism and one single, shiny lever to control the speed of the economy like the governor on a steam train. Yet here we are 50 years l…

It’s not entirely true. There’s plenty more levers on economy and inflation. This is the main one that central banks have.

For the elephant in the room, the current inflation woes are caused by oil price increase, which is a direct outcome of deliberate US policy.

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

#196

Post by jameslk » Thu, Sep 17, 2026, 2:53 AM UTC

kccoder wrote: post #186

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

The BBB, Iran war, and tariffs, something done solely by republicans, sometimes just the president, are the source of inflation, so you can attribute this situation mostly on Trump, and fully on republicans.

Higher inflation rates started before any of those, but those things didn’t help

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

#197

Post by mikewarot » Thu, Sep 17, 2026, 3:42 AM UTC

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…

I think this could be the thing that finally pops the AI circular financing bubble, leading to World Depression II. I'm not sure either of the existing 2 faces of the duopoly infesting politics will survive, and there's a non-zero chance this breaks civilization as supply chains collapse, and we enter a new dark ages.

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

#198

Post by HWR_14 » Thu, Sep 17, 2026, 4:10 AM UTC

what wrote: post #169

smackeyacky wrote: post #161

Earlier quoted context omitted.

I don’t understand why central banks seem to use such a blunt object like interest rates for every inflation problem. It would make sense to rise if the cause of inflation was accelerated economic activity, not price rises due to supply restrictions. How does hurting mortgage holders even more help with not starting wars? All it can do is have a double dampening effect on the economy as people pull back their discret…

> hurting mortgage holders How does raising rates hurt mortgage holders? They locked in their interest rate when they got the mortgage?

It's not good for the economy when no one is willing to move for the next 20-30 years. And it's not good for the people who are unable to move to chase a better job as well.

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

#199

Post by tossandthrow » Thu, Sep 17, 2026, 4:24 AM UTC

iamnothere wrote: post #103

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%

Only if you expect rates to come down in the future. If the monthly payment is the same, I guess you have a slightly bigger mortgage interest deduction for tax purposes, but you’re still paying the same amount each month. If you expect rates to come down soon, you can plan to refinance in the future, but that’s a gamble. Rates may not go down, or the value of the house could go down before you refinance, which may ma…

No?

Paying down a high interest mortgage will always have bigger impact on the dollar than paying down a low interest mortgage.

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

#200

Post by MarkusQ » Thu, Sep 17, 2026, 4:39 AM UTC

im_down_w_otp wrote: post #105

MarkusQ wrote: post #79

Earlier quoted context omitted.

> the Fed has no mechanism to really deal with supply-shock driven inflation. Inflation is just a change in the ratio of money to stuff. You can reduce inflation by increasing the stuff or reducing the money, and cause it by doing the opposite. There's no requirement that the solution is applied to "the same factor", either works. Sure, if you're wanting to assign blame or worried about externalities these things sta…

You’re describing only one flavor of inflation. What the Fed is supposed to care about is price stability, and lots of things influence prices, and not all of them are money supply and/or new money supply correspondent. We saw this during COVID, the prices of things shot through the roof because of a combination of supply-chain shocks as well as the already well capitalized seizing the opportunity to spend their war…

Inflation isn't like ice cream that comes in assorted flavors. It's a simple ratio (hard to measure in practice, but still conceptually simple).

If one side of a ratio is fluctuating (for whatever reason) the ratio's value can be stabilized by making corresponding adjustments to the other side. Amount of goods drops 10%? Reduce the money supply by 10%, bam!, no inflation.

There may be all sorts of policy or political reasons for not doing this, but that's not the same thing as saying that it's necessarily ineffective because the inflation in question is the wrong "flavor".