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Fed increases target rate to 3.75-4.00%

federalreserve.gov

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Re: Fed increases target rate to 3.75-4.00%

#81

Post by guyzero »

whimsicalism wrote: post #46
r00fus wrote: post #33

This will do nothing for actually impacting inflation. Instead it will crash the economy. Real inflation seems to be due to price gouging by companies[0], combined with energy increases due to OPEC price fixing [1], and rent increases due to collusion [2] and corporate domination housing market [3]. Jerome Powell had no answers to the Senate Oversight committee when asked how increasing rates would actually reduce th…

> Real inflation seems to be due to price gouging by companies Yes, it is too bad that our previously benevolent corporations all decided to end that benevolence in the year 2021 and gouge prices. > crash the economy for his buddies on Wall Street Of course, exactly what Wall Street wants.

It's an unexpected result that shortages of core consumer goods - specifically gas and food - cause a rise in prices due to demand but this has become more decoupled from underlying input costs thus... high corporate profits in these areas. It's true that Exxon isn't any more or less rapacious than ever, but their profits are objectively much, much higher.

Re: Fed increases target rate to 3.75-4.00%

#82

Post by WillPostForFood »

r00fus wrote: post #62
hornd wrote: post #42

Earlier quoted context omitted.

This is the current talking point du-jour of the American progressive left, but I think it's safe to say the Fed knows what they're doing and have done this before.

The "Fed" isn't some apolitical entity. It's lobbied and banks want to crash the economy so their wealthy clients can get in at the bottom. They have an agenda.

>banks want to crash the economy so their wealthy clients can get in at the bottom

This is like the left wing version of q anon craziness. Banks don't want the economy to crash - they are big losers when it crashes.

Re: Fed increases target rate to 3.75-4.00%

#83

Post by xhrpost »

whoooooo123 wrote: post #51
r00fus wrote: post #33

This will do nothing for actually impacting inflation. Instead it will crash the economy. Real inflation seems to be due to price gouging by companies[0], combined with energy increases due to OPEC price fixing [1], and rent increases due to collusion [2] and corporate domination housing market [3]. Jerome Powell had no answers to the Senate Oversight committee when asked how increasing rates would actually reduce th…

If inflation is caused by selfish companies raising their prices, why are they only doing it now and not, say, three years ago? Did they only decide recently that they want to make more money?

It's a good question, seems like corporations have more power to do so now, from linked article:

>Corporations have the power to raise prices without losing customers because they face so little competition. Since the 1980s, two-thirds of all American industries have become more concentrated.

Re: Fed increases target rate to 3.75-4.00%

#84

Post by WillPostForFood »

adventured wrote: post #28
apropos_g wrote: post #4

"I am once again asking for" a common sense explanation for how increasing interest rates will reduce the prices of retail food and gas. (This should be the new Deleuze meme.)

They're not trying to reduce existing prices per se. They're trying to reduce the extent of price increases going forward. The Fed can do that be damaging demand by damaging the labor market and reducing the value of assets (which also damages spending power ultimately in numerous ways). There should be a lot more consideration given to increasing and improving on the production side right now, however the US is not…

>There should be a lot more consideration given to increasing and improving on the production side right now

The US knows how to drill for oil and frack. It would help curb inflation and help Europe deal with Russia.

Re: Fed increases target rate to 3.75-4.00%

#85

Post by whimsicalism »

guyzero wrote: post #81
whimsicalism wrote: post #46

Earlier quoted context omitted.

> Real inflation seems to be due to price gouging by companies Yes, it is too bad that our previously benevolent corporations all decided to end that benevolence in the year 2021 and gouge prices. > crash the economy for his buddies on Wall Street Of course, exactly what Wall Street wants.

It's an unexpected result that shortages of core consumer goods - specifically gas and food - cause a rise in prices due to demand but this has become more decoupled from underlying input costs thus... high corporate profits in these areas. It's true that Exxon isn't any more or less rapacious than ever, but their profits are objectively much, much higher.

Of course it depends on the market but many of these "shortages" are only relative to record-high consumer demand for durable goods.

Yes, during periods of extremely high demand relative to current supply, profit for suppliers increases. This encourages new entrants to the market who can help boost supply.

This is just the basic functioning of the economy and price signals in action. If producing things in short supply weren't profitable, that short supply wouldn't get resolved.

Re: Fed increases target rate to 3.75-4.00%

#86

Post by adventured »

monkmartinez wrote: post #38
agildehaus wrote: post #16

I just started to have enough money for a decent downpayment on a house when all this rate hike started. Now I'm basically priced out.

A few months from now will be the best time to buy. You can renegotiate the terms of the loan, but you can never renegotiate the price you pay!!!!

The damage in the housing market will play out over several years. A few months from now will still be far too early into the damage. Wait longer. The hit to the housing market will run on a longer delay than that from the Fed's hikes, historically it always does.

Re: Fed increases target rate to 3.75-4.00%

#87

Post by Sin2x »

adventured wrote: post #50
nine_zeros wrote: post #22

Earlier quoted context omitted.

> "I am once again asking for" a common sense explanation for how increasing interest rates will reduce the prices of retail food and gas. It will not. The only way to reduce prices of oil/gas and fertilizers (for food) is to bring back the amount of oil/gas and ammonia that went offline due to Russia. There is no amount of digging anywhere in the world that will quickly replace this much lost natural resource. What…

Oil isn't a serious problem, neither is gasoline. The West can safely maintain the situation with Russia indefinitely. Brent has been in the $90s for a while now. That's equivalent to $65-$70 from ten years ago, which also wasn't a problem then. It's very modestly elevated at present. Natural gas may be a different matter, although the Europeans look like they can have that permanently solved over the next few years…

If it wasn't a problem, Biden wouldn't tour Iran, Venezuela and Saudi Arabia to get their oil and wouldn't open the national reserve. Nations literally live and die by the oil.

Re: Fed increases target rate to 3.75-4.00%

#88

Post by SantalBlush »

nightski wrote: post #57
r00fus wrote: post #33

This will do nothing for actually impacting inflation. Instead it will crash the economy. Real inflation seems to be due to price gouging by companies[0], combined with energy increases due to OPEC price fixing [1], and rent increases due to collusion [2] and corporate domination housing market [3]. Jerome Powell had no answers to the Senate Oversight committee when asked how increasing rates would actually reduce th…

I like how the law of supply and demand in economics has been renamed "price gouging" by democrats.

You're not wrong, but we see the same thing with the "labor shortage" rhetoric, which is just conservatives and business owners refusing to acknowledge supply and demand in the labor market.

Re: Fed increases target rate to 3.75-4.00%

#89

Post by r00fus »

WillPostForFood wrote: post #82
r00fus wrote: post #62

Earlier quoted context omitted.

The "Fed" isn't some apolitical entity. It's lobbied and banks want to crash the economy so their wealthy clients can get in at the bottom. They have an agenda.

>banks want to crash the economy so their wealthy clients can get in at the bottom This is like the left wing version of q anon craziness. Banks don't want the economy to crash - they are big losers when it crashes.

This is your point to prove. I proved Fed gets lobbied (see GP comment).

Re: Fed increases target rate to 3.75-4.00%

#90

Post by sokoloff »

guyzero wrote: post #81
whimsicalism wrote: post #46

Earlier quoted context omitted.

> Real inflation seems to be due to price gouging by companies Yes, it is too bad that our previously benevolent corporations all decided to end that benevolence in the year 2021 and gouge prices. > crash the economy for his buddies on Wall Street Of course, exactly what Wall Street wants.

It's an unexpected result that shortages of core consumer goods - specifically gas and food - cause a rise in prices due to demand but this has become more decoupled from underlying input costs thus... high corporate profits in these areas. It's true that Exxon isn't any more or less rapacious than ever, but their profits are objectively much, much higher.

Is there some shortage of oil or gasoline that I'm not aware of?
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