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Federal Reserve to increase interest rates by 75 basis points

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Re: Federal Reserve to increase interest rates by 75 basis points

#91

Post by heartbreak »

nimbius wrote: post #41
zamalek wrote: post #6

Very good. This is going to hurt quite a bit, but is going to prevent real pain in the long run. Much like something we should have all done a year ago.

I think you're right, but I'm a little pessimistic after covid relief and the 08 crash. we have 9.1℅ inflation and the damage control from the reigning party trying to explain away an obvious recession makes quarter point increases seem like performance art. student loans are already such an untenable debt bubble that the same potus that stumped for their perpetuity is now forgiving them. auto loans are an equally pr…

The President is hardly forgiving student loans. So far the government has only forgiven loans of students who went to scam schools.

Re: Federal Reserve to increase interest rates by 75 basis points

#92

Post by dragonwriter »

ParksNet wrote: post #66
mywittyname wrote: post #47

I'm skeptical that interest rate hikes will curb inflation. I'm even skeptical that a recession will curb inflation. We have significant shortages of so many products and services that people rely on and the only way I see the situation improving is if supplies increase, maybe dramatically. It's too difficult to curb demand for things like food and housing if the population is growing. Those are things we just need t…

Easiest way to increase labor supply is to immediately increase the retirement age to 70. Welfare and retirement systems across the West are insolvent at current settings anyway.

> Easiest way to increase labor supply is to immediately increase the retirement age to 70.

The actual maximum benefit retirement age for Social Security is already 70.

The misleadingly named “full retirement age” is 67, but I don't think squeezing three more years out of the non-disabled elderly is going to do as much good for the industries where demand exists as you think.

EDIT: Also, proposing an immediate increase to the retirement age is probably the easiest way to lose one’s next election in most US constituencies; there's a reason why the increases adopted in 1983 had a phase in starting 17 years after they were passed.

Re: Federal Reserve to increase interest rates by 75 basis points

#93

Post by powerhour »

ParksNet wrote: post #66
mywittyname wrote: post #47

I'm skeptical that interest rate hikes will curb inflation. I'm even skeptical that a recession will curb inflation. We have significant shortages of so many products and services that people rely on and the only way I see the situation improving is if supplies increase, maybe dramatically. It's too difficult to curb demand for things like food and housing if the population is growing. Those are things we just need t…

Easiest way to increase labor supply is to immediately increase the retirement age to 70. Welfare and retirement systems across the West are insolvent at current settings anyway.

Alternatively, or perhaps in addition, we can begin lowering the Medicare enrollment age so we can free employers from the burden of overseeing health insurance plans. This would also free up workers currently wasted on interacting with insurance companies on behalf of providers. It's win-win-win-lose (the winners are everyone but the insurance companies, and I'd wager the former vastly outnumbers the latter).

Re: Federal Reserve to increase interest rates by 75 basis points

#94

Post by tcmart14 »

fenek wrote: post #29

I don't get it. The price of gas I'm paying in the US, has dropped by 20% in the last month or so. That seems to indicate that prices are going back to normal. What prices is fed concerned about?

I am not an economic expert, so you may take with a grain of salt. Gases, prices, a complex topic. From my understanding there are/were two things causing increases in price. First is just inflation across the board that affects all items. The second is the oil specific problem of, there is plenty of crude oil, but not enough was being refined, leading to a lack of supply for actual gasoline. Some measures have been taken to curb the later problem of not enough refining. The prices dropping could be a product of that. To my knowledge the cause of that was exposing some of the crude supply to the wider world so places that had the capacity to refine more could take it and refine it. The US and several other nations were already running at capacity. Building more capacity is a long term solution, but needs year to build new refineries. The short term solution is to let whoever had slack capacity to take it, refine it, and put back out into the global market.

So the price decrease we see is probably more from the later, but there is still impact from the former. As a reminder, this goes more specifically for gas prices and not necessarily all prices on all items in general.

Re: Federal Reserve to increase interest rates by 75 basis points

#95

Post by d4mi3n »

CoffeeCollector wrote: post #74
seibelj wrote: post #58

Earlier quoted context omitted.

It's almost like you are encouraging supply side economics... aka... trickle down We need to massively cut corporate taxes, investment taxes, regulations, and all manner of things to increase supply. The government has been attacking business for so long we are in quite the hole.

You are getting down voted for telling the truth. Every inflation discussion starts with the supply side economics or companies raising taxes, but inflation only happens in reality because of government spending, borrowing, and deficit spending.

> but inflation only happens in reality because of government spending, borrowing, and deficit spending.

This is incorrect. Note that governments around the world are also experiencing record levels of inflation and each has their own fiscal policy.

Inflation is an aggregate economic effect driven by a variety of factors—including but by no means limited to government spending. Other things that contribute to inflation:

1. Supply shortages

2. Cost of living

3. Abundance of capital (low interest rates, high wages, etc)

4. Speculation

Basically anything that contributes to groups of people assigning a higher value to the same set of goods or services.

Supply is the most immediately noticeable cause and COVID has disrupted supply chains for some time. It is entirely unsurprising we've seen inflation as a result. Government policy has certainly played a part, but blaming everything on government spending is misleading in that ignores the larger realities of inflation beyond the borders of any nation state.

Re: Federal Reserve to increase interest rates by 75 basis points

#96

Post by throwaway4good »

mywittyname wrote: post #47

I'm skeptical that interest rate hikes will curb inflation. I'm even skeptical that a recession will curb inflation. We have significant shortages of so many products and services that people rely on and the only way I see the situation improving is if supplies increase, maybe dramatically. It's too difficult to curb demand for things like food and housing if the population is growing. Those are things we just need t…

The Russians curbed inflation at the start of the war quite effectively ... by raising interest rates to 20%.

Re: Federal Reserve to increase interest rates by 75 basis points

#98

Post by Maximus9000 »

codetrotter wrote: post #77
ParksNet wrote: post #66

Earlier quoted context omitted.

Easiest way to increase labor supply is to immediately increase the retirement age to 70. Welfare and retirement systems across the West are insolvent at current settings anyway.

Idk what the retirement age in other countries is but here in Norway I think it is currently 67. How much additional productive work do we realistically expect people to be able to supply, from age 67 to age 70?

Canada had it at 67 for awhile, but it recently got pushed back down to 65. IMO, it should have stayed at 67.

Re: Federal Reserve to increase interest rates by 75 basis points

#99

Post by bronco21016 »

waythenewsgoes wrote: post #71
seibelj wrote: post #58

Earlier quoted context omitted.

It's almost like you are encouraging supply side economics... aka... trickle down We need to massively cut corporate taxes, investment taxes, regulations, and all manner of things to increase supply. The government has been attacking business for so long we are in quite the hole.

This doesn't work, when we tried this most recently all it did was increase stock buybacks by large corps. It's just effectively a wealth transfer to those already at the top of the food chain.

This exactly. Look at airlines. They lit tens of billions on fire in stock buy backs rather than pouring it into their businesses from 2015-2020.

Who got the first corporate handouts when COVID decimated travel?

Individual actors will act in their best interest according to the incentive structure in place.

Re: Federal Reserve to increase interest rates by 75 basis points

#100

Post by 01100011 »

chromaton wrote: post #78
mywittyname wrote: post #47

I'm skeptical that interest rate hikes will curb inflation. I'm even skeptical that a recession will curb inflation. We have significant shortages of so many products and services that people rely on and the only way I see the situation improving is if supplies increase, maybe dramatically. It's too difficult to curb demand for things like food and housing if the population is growing. Those are things we just need t…

Prices on raw materials like aluminum, copper, and lumber have been dropping for a little while now.

That could just be bullwhip effects and we'll settle out to overall price increases. I believe that's what is happening with lumber. The overall trend is up, even though the prices came back down from the big highs.
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