Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Federal Reserve raises rates by 0.75%

usatoday.com

Post reply on HN
Print view View original

41–50 of 593 posts

Re: Federal Reserve raises rates by 0.75%

#41

Post by Mountain_Skies »

djbusby wrote: post #12
morninglight wrote: post #7

> Seniors, should reap the benefits of higher bank savings rates after years of piddling returns. Not to any significant degree. Bank rates won't come close to offsetting the effect of inflation. The big winner will be the IRS, as intended. .

How does IRS win here?

Unless the tax brackets are adjusted, inflation with rising wages means more people in higher tax brackets. If corporate earnings go up, there's more for the IRS too though that might be wiped out by the lessening value of each dollar.

Re: Federal Reserve raises rates by 0.75%

#42

Post by kelnos »

hunterb123 wrote: post #11
rich_sasha wrote: post #6

Earlier quoted context omitted.

In fairness, inflation seems largely driven by energy prices, which in turn are driven by the Russian invasion of Ukraine. Not the top event I'd imagine a bank predicting well.

then why was the administration dismissing it as temporary before the invasion? inflation was clearly caused by injecting trillions into the economy for "covid" slush funds. as far as energy goes, we were net exporters until the federal restrictions started coming in, only then did we start relying on foreign production. blaming your domestic problems on a foreign adversary is routine, but it's not accurate, helpful,…

I agree that we can't blame this on Putin (though he's not helping), but I think the obvious reason for much of the inflation is right in front of us: people want to buy many many things, but they just aren't available in large enough quantities. The Fed injecting money into the economy is nothing new; speaking of goldfish brain, have we so easily forgotten 2008?

Re: Federal Reserve raises rates by 0.75%

#43

Post by ClumsyPilot »

hunterb123 wrote: post #11
rich_sasha wrote: post #6

Earlier quoted context omitted.

In fairness, inflation seems largely driven by energy prices, which in turn are driven by the Russian invasion of Ukraine. Not the top event I'd imagine a bank predicting well.

then why was the administration dismissing it as temporary before the invasion? inflation was clearly caused by injecting trillions into the economy for "covid" slush funds. as far as energy goes, we were net exporters until the federal restrictions started coming in, only then did we start relying on foreign production. blaming your domestic problems on a foreign adversary is routine, but it's not accurate, helpful,…

> inflation was clearly caused by injecting trillions into the economy for "covid" slush funds.

It was clearly caused by supply chain collapse

Re: Federal Reserve raises rates by 0.75%

#44

Post by colechristensen »

nostromo wrote: post #4

It seems the Fed is stuck in a state of overreaction. First they overshoot on money printing, then they disregard early signs of inflation, and now they're in a panic in the opposite direction. Seeing the news this week that Bernanke said that the Fed should be able to pull off a soft-landing now in 2022 gave me an uncomfortable déjà vu -- he said the same in 2006 and 2007, right before he raised rates enough to kick…

It's not overreaction, it's late reaction.

Inflation hit the stock market a long time ago, inflation is now hitting consumers, the fed rate is now many percent low.

What actually needed to happen is QE needed to end a lot sooner, interest rates needed to be raised moderately months ago.

All of this should have been entirely predictable, but instead of "oh god this is ready to blow" when stock market valuations were way above prepandemic levels everyone was like "this is awesome, I bet it'll keep going!"

There's no free lunch, you can't pump that much money into an economy that isn't doing a lot and not have consequences.

Re: Federal Reserve raises rates by 0.75%

#45

Post by jcadam »

nostromo wrote: post #22
mark_l_watson wrote: post #17

You can argue either side to this, and make a good case. My personal preference is to trigger a recession and reduce inflation. The easy cop-out solution is to say a "big f*ck off" to pensioners, lower middle class, and poor people and let inflation soar, but I believe that long term this would be more destructive to the general economy. Better take the long term view here and not kick the can down the street.

A key driver to inflation is that wages for lower-income workers was finally starting to rise. Tanking the economy will hurt these people the most. But yes, inflation would flatten.

Still waiting for inflation to hit my effing salary.

I know it won't, because we're entering stagflation territory and unemployment is going to go up. COVID was a massive wealth transfer from the lower and (esp) middle class to the oligarchs.

Re: Federal Reserve raises rates by 0.75%

#46

Post by hunterb123 »

bombcar wrote: post #32
rolobio wrote: post #15

Earlier quoted context omitted.

I was blown away when the president claimed he "has never seen anything like Putin’s tax on both food and gas". When did Putin get the ability to raise taxes in the US??

When America shuts down or reduces its own oil supply, those holding the rest of the world's supply get more leverage.

We reduced our oil production before the invasion. Gas prices were multiplying before the invasion.

Putin did not force the reduction of our own supply. The current administration did.

The invasion may have been the consequence of the reduction of our production and amplified the "price hikes", but it wasn't the cause of the "price hikes", the initial action of reducing production and relying on foreign imports was.

Re: Federal Reserve raises rates by 0.75%

#47

Post by NDizzle »

hunterb123 wrote: post #11
rich_sasha wrote: post #6

Earlier quoted context omitted.

In fairness, inflation seems largely driven by energy prices, which in turn are driven by the Russian invasion of Ukraine. Not the top event I'd imagine a bank predicting well.

then why was the administration dismissing it as temporary before the invasion? inflation was clearly caused by injecting trillions into the economy for "covid" slush funds. as far as energy goes, we were net exporters until the federal restrictions started coming in, only then did we start relying on foreign production. blaming your domestic problems on a foreign adversary is routine, but it's not accurate, helpful,…

> does the "putin price hike" talking point really work on anyone?

Unfortunately, yes it does. It works very well for a significant amount of the population. I've found that there is an incredible overlap in the number of people who think Putin is to blame and those still wearing masks in public.

Re: Federal Reserve raises rates by 0.75%

#49

Post by fsociety999 »

iso1631 wrote: post #23
roody15 wrote: post #14

Earlier quoted context omitted.

Agree the Russian invasion doesn't help matters... but this is not the primary cause of inflation. The amount of money that the US has simply created and spent in last couple of years in unprecedented. The amount of money inserted into the US economy dwarfs that of the TARPP and related bailouts of 2008 by a factor of 4. You just cannot create and hand out that much cash in an economy and not expect inflation.

If you think the dollar is worth less then no doubt that's reflected in say gold prices, which were between 1600 and 1900 from July 2011 to April 2013. They are currently 1800. If all that extra money had devalued fiat currencies globally (at roughly the same value), why hasn't gold increased?

Gold markets are manipulated like crazy. This article talks about it a bit https://www.bullionstar.com/blogs/ronan-manly/gold-silver-pr...

There have been a number of cases of banks being found guilty of it as well: - https://www.reuters.com/article/us-usa-metals-charges/u-s-ch... - https://www.reuters.com/article/jp-morgan-spoofing-penalty-i...

Look up naked short selling if you want to see how this works. Essentially, futures markets allow trading gold without holding any physical gold so banks can take dollars and use that to short the price of gold. It has gotten to the point where more “paper gold” is bought and sold on futures markets than physical gold that exists in the world.

Re: Federal Reserve raises rates by 0.75%

#50

Post by Mountain_Skies »

kelnos wrote: post #33
rolobio wrote: post #15

Earlier quoted context omitted.

I was blown away when the president claimed he "has never seen anything like Putin’s tax on both food and gas". When did Putin get the ability to raise taxes in the US??

You do understand that he didn't mean "tax" literally, right?

Yes, but it's unnecessary rhetoric that is distasteful enough when a political candidate uses it but downright disgusting when an office holder does it. He knows better and instead of being the leader of the country, he's playing political games (to be fair, that's pretty much par for the course for all of the political class). He didn't have to use that word, he chose to use that word, because he, or his speech writers, liked the connotation.
Post reply on HN