71–80 of 693 posts
Earlier quoted context omitted.
Someone posted the graph earlier: https://www.macrotrends.net/2015/fed-funds-rate-historical-c... Fed funds rate in the early 80s were at their historical peak. We are still currently at near historical lows.
How did anyone buy a house or a car with interest rates in the 20%s?
The Fed is trapped: It can’t raise too much since trillions of debt rely on very low rates. If it doesn’t raise enough then inflation will cause a recession.
It’s even worse - if the Fed actions tank the markets, then millions of retirees who have been enjoying high market values are screwed and have no other source of wealth or income. I do not envy the position the Fed is in.
Earlier quoted context omitted.
It has everything to do with it. If they were higher, people would go bankrupt, not have money to drive, use less gas/oil, thus reducing demand, thus reducing price, thus reducing inflation.
It certainly does not have everything to do with it. The answer is somewhere in the middle. Cheap money absolutely causes inflation, but so do global supply chain breakdowns.
It doesn't particularly make sense to call the current rising oil price inflation (that would make "inflation" just a synonym for price increases), but the price of energy going up will cause broad price inflation down the line.
The Fed is trapped: It can’t raise too much since trillions of debt rely on very low rates. If it doesn’t raise enough then inflation will cause a recession.
It’s even worse - if the Fed actions tank the markets, then millions of retirees who have been enjoying high market values are screwed and have no other source of wealth or income. I do not envy the position the Fed is in.
On the one hand, retirees bring nothing of real value to the economy. We serve them because of the obligations they built up over their working careers. But, they get the focus of attention because a) they have all the money, b) they have all the time to be engaged in politics, and c) they vote. But they're purely an extractive cost center. A kind of economic parasite that keeps getting bigger and bigger with the magic of compounding interest.
On the other hand, the younger working class generations, who are the real engines of the economy that keep us all fed and served, are legitimately suffering and failing to acquire a significant stake in the economy. Sure, employment is high but pay is low compared to their parents. When shit hits the fan, the young generations are largely gonna shrug, because who fights to defend something they don't have a stake in?
It really seems like a powder keg for revolution.
Earlier quoted context omitted.
It’s even worse - if the Fed actions tank the markets, then millions of retirees who have been enjoying high market values are screwed and have no other source of wealth or income. I do not envy the position the Fed is in.
Oh no! Boomers will lose 401(k) value! The horror!
Earlier quoted context omitted.
It’s even worse - if the Fed actions tank the markets, then millions of retirees who have been enjoying high market values are screwed and have no other source of wealth or income. I do not envy the position the Fed is in.
Oh no! Boomers will lose 401(k) value! The horror!
Earlier quoted context omitted.
It’s even worse - if the Fed actions tank the markets, then millions of retirees who have been enjoying high market values are screwed and have no other source of wealth or income. I do not envy the position the Fed is in.
Oh no! Boomers will lose 401(k) value! The horror!
The Fed is trapped: It can’t raise too much since trillions of debt rely on very low rates. If it doesn’t raise enough then inflation will cause a recession.
It’s even worse - if the Fed actions tank the markets, then millions of retirees who have been enjoying high market values are screwed and have no other source of wealth or income. I do not envy the position the Fed is in.
Plus, at least current US retirees have social security, which may not last another 20+ years in current form (unfortunately for people paying in today).
Most surprising part of this FOMC had to be when Powell said "we would like to slow demand" during the press conference, you don't usually hear the quiet part out loud like that from this Fed chair. Also shift upwards in PCE in the SEP, plus the dots, all seems appropriately hawkish
> Most surprising part of this FOMC had to be when Powell said "we would like to slow demand" during the press conference, you don't usually hear the quiet part out loud like that from this Fed chair. That's...not really a “quiet part”, it's the widely acknowledge, overt nature of managing inflation. That the Fed’s dual mandate involves employment and price stability, and that those are in tension because controlling…
Earlier quoted context omitted.
It’s even worse - if the Fed actions tank the markets, then millions of retirees who have been enjoying high market values are screwed and have no other source of wealth or income. I do not envy the position the Fed is in.
Oh no! Boomers will lose 401(k) value! The horror!