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"Not so bad" inflation has fed hiking rates.

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  • #16
    Originally posted by seanD View Post

    Where is "my solution"? Show me the post I offered a solution. There really is no solution.

    Non-descretionary goods became expensive because of the same reason everything else became expensive (not sure if that was rhetorical question) -- inflation. The inflation was a result of global central banks unprecedented money printing. The excess money created excess demand at the same time supply was smothered globally by pandemic and lockdowns, and this happened on a global level. Personally, I believe we've still yet to see the full effects of that (as there is a lag effect to inflation), which is why I'd be surprised if inflation actually started to fall consistently anytime soon, especially considering central banks are still grossly behind the curve of fighting it.
    There are so many contradictions in what you say it is hard to even work out what you're moaning about, but Biden bad - so, he to blame no matter what.

    Comment


    • #17
      Originally posted by seanD View Post

      Aside from the inflation, if you have no debt as a consumer you're good to go.
      My debt is minimal, and can be eliminated easily at any time. The only reason I keep it was because it was originated with 1.8% interest rates or such, and I make more than that in my savings account.
      The first to state his case seems right until another comes and cross-examines him.

      Comment


      • #18
        Originally posted by seanD View Post

        I'm not so sure about unemployment. It may go up, but we've been in a recession for two quarters already with a crashing market since the start of the year yet we're still at unemployment lows. Also, there's not much local politics can do to stop it (they only exacerbate it) because the inflation is global with major central banks around the world doing the exact same tightening. Sweden central bank just raised their rate to full 1.00 bps.
        That's part of the point of raising inflation (though said indirectly). Raising the rates is done to hit the brakes on the economy. This is done by raising the cost of money, slowing demand of companies, halting expansion, etc. All of this will cause layoffs, and it's not exactly a bug or a side effect of doing so.


        Source: https://www.federalreserve.gov/faqs/money_12856.htm

        As the Federal Reserve conducts monetary policy, it influences employment and inflation primarily through using its policy tools to influence the availability and cost of credit in the economy.

        The primary tool the Federal Reserve uses to conduct monetary policy is the federal funds rate—the rate that banks pay for overnight borrowing in the federal funds market. Changes in the federal funds rate influence other interest rates that in turn influence borrowing costs for households and businesses as well as broader financial conditions.

        For example, when interest rates go down, it becomes cheaper to borrow, so households are more willing to buy goods and services, and businesses are in a better position to purchase items to expand their businesses, such as property and equipment. Businesses can also hire more workers, influencing employment. And the stronger demand for goods and services may push wages and other costs higher, influencing inflation.

        During economic downturns, the Fed may lower the federal funds rate to its lower bound near zero. In such times, if additional support is desired, the Fed can use other tools to influence financial conditions in support of its goals.

        However, there are many factors that affect inflation and employment. And while the linkages from monetary policy to both inflation and employment are not direct or immediate, monetary policy is an important factor.

        © Copyright Original Source

        Comment


        • #19
          Originally posted by CivilDiscourse View Post

          That's part of the point of raising inflation (though said indirectly). Raising the rates is done to hit the brakes on the economy. This is done by raising the cost of money, slowing demand of companies, halting expansion, etc. All of this will cause layoffs, and it's not exactly a bug or a side effect of doing so.


          Source: https://www.federalreserve.gov/faqs/money_12856.htm

          As the Federal Reserve conducts monetary policy, it influences employment and inflation primarily through using its policy tools to influence the availability and cost of credit in the economy.

          The primary tool the Federal Reserve uses to conduct monetary policy is the federal funds rate—the rate that banks pay for overnight borrowing in the federal funds market. Changes in the federal funds rate influence other interest rates that in turn influence borrowing costs for households and businesses as well as broader financial conditions.

          For example, when interest rates go down, it becomes cheaper to borrow, so households are more willing to buy goods and services, and businesses are in a better position to purchase items to expand their businesses, such as property and equipment. Businesses can also hire more workers, influencing employment. And the stronger demand for goods and services may push wages and other costs higher, influencing inflation.

          During economic downturns, the Fed may lower the federal funds rate to its lower bound near zero. In such times, if additional support is desired, the Fed can use other tools to influence financial conditions in support of its goals.

          However, there are many factors that affect inflation and employment. And while the linkages from monetary policy to both inflation and employment are not direct or immediate, monetary policy is an important factor.

          © Copyright Original Source

          The Fed has been raising rates since March. We've definitely seen two quarters of negative growth and a crashing market since then. So far we haven't seen unemployment budge. Maybe we will, in theory we should, but I'm not sure. And if it does start to tick up, by how much.

          Comment


          • #20
            Originally posted by Zara View Post

            There are so many contradictions in what you say it is hard to even work out what you're moaning about, but Biden bad - so, he to blame no matter what.
            I didn't mention Biden once in this thread until now. You've mentioned him more than once. Maybe you have Biden derangement.

            Comment


            • #21
              Originally posted by seanD View Post

              The Fed has been raising rates since March. We've definitely seen two quarters of negative growth and a crashing market since then. So far we haven't seen unemployment budge. Maybe we will, in theory we should, but I'm not sure. And if it does start to tick up, by how much.
              I believe that they have said the plan is to hike rates up to around 4.45% The last time they hiked it that high was during the 2007 recession.


              Source: https://www.reuters.com/markets/us/forecast-fed-terminal-rate-hits-new-high-shaking-stocks-bonds-2022-09-16/


              NEW YORK, Sept 16 (Reuters) - Expectations of how aggressively the Federal Reserve will raise rates in its fight against inflation hit a fresh high this week, exacerbating pressures on stocks and bonds.

              As investors await another jumbo rate increase from the U.S. central bank at its Sept. 20-21 meeting, higher-than-expected inflation numbers have ramped up bets on the so-called terminal rate, which now stand at 4.45%, Refinitiv data showed.

              © Copyright Original Source

              Comment


              • #22
                Originally posted by seanD View Post

                I didn't mention Biden once in this thread until now. You've mentioned him more than once. Maybe you have Biden derangement.
                fair enough, I recall all the moans about inflation being Biden's fault, so well.. good good.

                Comment


                • #23
                  Originally posted by CivilDiscourse View Post

                  I believe that they have said the plan is to hike rates up to around 4.45% The last time they hiked it that high was during the 2007 recession.


                  Source: https://www.reuters.com/markets/us/forecast-fed-terminal-rate-hits-new-high-shaking-stocks-bonds-2022-09-16/


                  NEW YORK, Sept 16 (Reuters) - Expectations of how aggressively the Federal Reserve will raise rates in its fight against inflation hit a fresh high this week, exacerbating pressures on stocks and bonds.

                  As investors await another jumbo rate increase from the U.S. central bank at its Sept. 20-21 meeting, higher-than-expected inflation numbers have ramped up bets on the so-called terminal rate, which now stand at 4.45%, Refinitiv data showed.

                  © Copyright Original Source

                  You make it sound like the correct place for interest rates is 0%.

                  Comment


                  • #24
                    Originally posted by Zara View Post

                    You make it sound like the correct place for interest rates is 0%.
                    The fed uses interest rates like a gas pedal on a car. There isn't a "correct" place, so much as understanding what pushing or letting up on it is going to do.

                    Comment


                    • #25
                      Originally posted by Zara View Post

                      fair enough, I recall all the moans about inflation being Biden's fault, so well.. good good.
                      Do you actually read and comprehend posts? If I said inflation was a global thing -- and that's a fact -- and that it was created by central banks around the world -- that's a fact -- why would you assume I was only targeting Biden? How does that make sense, or did you not read my post?

                      As far as high prices here in the states, it is Biden's fault, but not only his fault.

                      And though the Dems have exacerbated the problem (what effects do you think debt forgiveness will have on already high demand?) and keep exacerbating it with their insane policies, they weren't the source of the problem. They can't be the source when the problem is global.

                      Comment


                      • #26
                        Originally posted by seanD View Post

                        Where is "my solution"? Show me the post I offered a solution. There really is no solution.

                        Non-descretionary goods became expensive because of the same reason everything else became expensive (not sure if that was rhetorical question) -- inflation. The inflation was a result of global central banks unprecedented money printing. The excess money created excess demand at the same time supply was smothered globally by pandemic and lockdowns, and this happened on a global level. Personally, I believe we've still yet to see the full effects of that (as there is a lag effect to inflation), which is why I'd be surprised if inflation actually started to fall consistently anytime soon, especially considering central banks are still grossly behind the curve of fighting it.
                        One of the biggest downward pressures on the economy is energy policy, but those in power are trying to convince us that it's our fault by blaming it on demand, the implication being "If you weren't so greedy, then we wouldn't be in this mess!"
                        Some may call me foolish, and some may call me odd
                        But I'd rather be a fool in the eyes of man
                        Than a fool in the eyes of God


                        From "Fools Gold" by Petra

                        Comment


                        • #27
                          Originally posted by Mountain Man View Post

                          One of the biggest downward pressures on the economy is energy policy, but those in power are trying to convince us that it's our fault by blaming it on demand, the implication being "If you weren't so greedy, then we wouldn't be in this mess!"
                          Yeah, there's a lot going on politically and globally. Which is why it's difficult to parse how and why all this is happening all at once. Is all this orchestrated, or is it all just accidental? It at least seems orchestrated because the climate change cult global elites in the west are definitely capitalizing on these crises for their 2030 climate agenda.

                          Comment


                          • #28
                            Originally posted by Zara View Post

                            There are so many contradictions in what you say it is hard to even work out what you're moaning about, but Biden bad - so, he to blame no matter what.
                            Buck Stops where again?

                            Comment


                            • #29
                              Originally posted by seanD View Post

                              Do you actually read and comprehend posts? If I said inflation was a global thing -- and that's a fact -- and that it was created by central banks around the world -- that's a fact -- why would you assume I was only targeting Biden? How does that make sense, or did you not read my post?

                              As far as high prices here in the states, it is Biden's fault, but not only his fault.

                              And though the Dems have exacerbated the problem (what effects do you think debt forgiveness will have on already high demand?) and keep exacerbating it with their insane policies, they weren't the source of the problem. They can't be the source when the problem is global.
                              Great, inflation is a global thing. No more claiming it is a Biden thing by you. Thanks for that.

                              It seems that people can't afford non-discretionary goods, since the number of people hasn't changed so much in the US nor can non-discretionary spending change, moaning about anything else is meaningless. Who cares if poor people can't afford things that they don't need.

                              Debt forgiveness is only a problem if it affects demand for non-discretionary spending, but if you think it is inflationary that means that that debt was toxic for those people - since they can't afford to live.

                              The OP is moaning about Biden, you've moaned a lot about Biden and inflation - but I guess you're not moaning about that anymore, great.

                              Comment


                              • #30
                                Originally posted by CivilDiscourse View Post

                                Buck Stops where again?
                                Not with Biden if it is related to inflation in the US, since it is a global problem, unless it has to do with Russia - in which case, sure. But that is a problem that needs to be dealt with, so, can't change the weather.

                                Comment

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