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Just to be short and sweet and cut to the chase, we all know the FED sells tremendous amounts of debt, already lowered interest rates about as low as they can go, bailed people out, etc etc.
What exactly does the FED have left to fight the next recession or crisis? Are there any nuclear options that haven't been exercised yet?
The Fed is raising rates NOT because of good times. They continue to raise rates because they failed to raise before and this is the only time they can, and they need to before the next downturn leaves them unable to lower rates. In case you people wonder it is a defensive measure, not a testament to a wonderful economy.
That's what happens when you blow up your balance sheet and cut rates to zero even after the economic cycle passes far beyond the mid point. Cutting it's balance sheet and raising rates is difficult because doing so is on the heels of a new cyclical down side and may cause or exacerbate it. The worst part is that not clearing their balance sheet or having interest rates higher gives them no leeway helping America when the next downturn occurs.
The Fed was too busy feeding their banker friends faces and sadly Americans will pay the price as always.
Oh and by the way, if some of you think you are all good, you escaped the Fed by riding their asset bubbles, you will only know if you escaped their carnage when it blows up.
The economy is doing quite well. The US labor market is doing quite well.
No it's not. Our economy has bean dead and on life support since 2001. Your problem is that you can't accept the truth. The problem for you and other status quo supporters is that some of us KNOW the real truth!!!!
Everything since 2001 has been a SCAM engineered by the FED. It's actually CRIMINAL.
The economy is doing quite well. The US labor market is doing quite well.
The people who actually are doing quite well -- and much, much better than those actually in the labor market -- confidently assure you that this is the case. You may take this as an article of faith. But please do not look behind the curtain.
The people who actually are doing quite well -- and much, much better than those actually in the labor market -- confidently assure you that this is the case. You may take this as an article of faith. But please do not look behind the curtain.
The Federal Reserve policy inhibits income from a brunt of people through savings in bank deposits, CDs, Bonds, etc. It incorrectly leads to massive asset gains in real estate and stocks, however, the prime beneficiaries of this are the better off or the rich. Worse yet, their low interest rate policy for year upon year has killed growth, discouraged capital investment, and is slowly destroying capitalism from the inside out.
The sad fact is this is unfairly hurting retirees who saved for retirement as well as young people trying to enter into the job market, and the lower income class.
I read something recently that Deutche bank said next recession, the Fed will do a $1 to $2 trillion QE. Guess that's the only option.
My bright spot of glimmer is that the next Internet revolution type of tech will be invented. We don't even know what that tech is yet...the masses didn't know about the internet until the 90's (unless you were in on it from the Arpanet days)
The current economy is the best it's been in the 21st century so far. It literally has not been this good since the 1990s.
Problem is, the gains are disproportionately enjoyed by certain sub-groups of people which are all some variety of "yuppie" - creative class yuppies, silicon valley yuppies, STEM yuppies, the Mr. Potter real estate speculators who had cash to buy in the downturn and are now getting rich renting out their Pottersvilles, and obviously the wall street types.
The broad middle classes are doing okay but not as well as they should given the gains among those lucky sub-groups. Their wages are keeping place with inflation barely, but they're dealing with a triple squeeze of rents/housing prices, health insurance and healthcare costs, and college tuition keeps going up. Plus there are many things that seem threatening to them - automation, eCommerce, immigrants, trade taking their jobs, etc..
The working classes are doing okay... service jobs, especially restaurants, are being created like baby rabbits. But making it into the middle isn't very easy to do with that triple squeeze I talked about, and most of these service jobs are dead-end and temporary.
The crazy thing that I hear from people like Donald Trump, is that the answer is to "prime the pump" - cut taxes and borrow money for infrastructure. Priming the pump in an economy with 4.4% unemployment will cause the tank to overflow... then all it will take is someone flicking a stray cigarette ember to blow the thing all up. We should be working to fix that inequality and equity problem, not creating bubbles.
The fed? They have no clue. Business creates jobs the fed can aid them and the fed gov can kill them but only business creates lasting meaningful jobs
This guys gets it.
Gvmnt IS the problem, not the solution,
so said R. Reagan.
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