The Federal Reserve is about to raise interest rates as inflation continues to surge (calculate, real estate)

[tillman7]

The Feds have the tools to curb inflation.

https://www.npr.org/2022/03/16/10864...ates-inflation

[JPrzybylski07]

Originally Posted by tillman7

The Feds have the tools to curb inflation.

https://www.npr.org/2022/03/16/10864...ates-inflation

Lol.. yea okay. Unless they raise interest rates to 10% it isn’t going to curb a thing.

[scoutflyer]

If the Fed continues to increase the fed funds rate, will we see that trickle down to higher interest rates on savings account deposits? Trying to figure out if I should keep a large emergency/savings fund vs. just taking that extra money and paying down my mortgage (4% interest rate on $40k outstanding balance of mortgage).

[skeddy]

these quarter point rises won't mean much until we have 6 of them.

[mojo101]

Originally Posted by scoutflyer

If the Fed continues to increase the fed funds rate, will we see that trickle down to higher interest rates on savings account deposits? Trying to figure out if I should keep a large emergency/savings fund vs. just taking that extra money and paying down my mortgage (4% interest rate on $40k outstanding balance of mortgage).

I have been waiting for the rate hike and moved my money to money market instead of CD 1 1/2 years ago ,all I got is pathetic 0.53%.
And you wonder why people are not motivated to save.

[Mircea]

Originally Posted by tillman7

The Feds have the tools to curb inflation.

History will repeat itself yet again.

When the Korean War began, rationing had just ended a few months earlier.

Households, business and industry were in a panic because they were certain the government would start rationing again, and so they started hoarding everything.

That caused Demand-pull Inflation and prices were rising at 10% annual rate.

To end it, all that needed to be done was for President Truwoman to get on the radio/TV and say:

1) Yes, we are going to ration, and here's where you can get your ration coupons; or
2) No, we have no intention of rationing anything; or
3) We are going to ration these items an no others

Instead, Truwoman moped and sulked in the Oval Office because the Supreme Court was beating up on him.

The Federal Reserve stupidly raised interest rates to stop something it could not stop because it is not the cause of Demand-pull Inflation and that crashed your economy and started a recession.

Had the Federal Reserve taken no action, Demand-pull Inflation would have ceased once households, business and industry saw there would be no rationing and then the war ended anyway so that was the end of that.

That wasn't the only time the Federal Reserve caused a recession by misinterpreting inflation data.

Apparently, you still haven't learned the differences between Monetary Inflation, Demand-pull Inflation, Cost-push Inflation, and Wage Inflation, which qualifies you to be a Federal Reserve board member.

Do let us know when you do learn.

[mojo101]

more effective,Fed will stop buying ,instead it will sell what it bought

[C2BP]

I keep telling you guys that ECONOMIC RECOVERY is an illusion and since 2020 COVID has done some permanent damage to the global economy. When curves shifted the FED wasn't even considering rate hikes at that time. Rate hikes were born yesterday, recession and deflation risks weren't. And you'd have to have been born yesterday if you think the market is worried about rate hikes. I keep telling you that deflationary forces never went away but no one wants to listen. Everyone is following mainstream media inflation hysteria narrative.

Good Luck!

[adjusterjack]

Originally Posted by scoutflyer

If the Fed continues to increase the fed funds rate, will we see that trickle down to higher interest rates on savings account deposits? Trying to figure out if I should keep a large emergency/savings fund vs. just taking that extra money and paying down my mortgage (4% interest rate on $40k outstanding balance of mortgage).

There is no better feeling than having your house free and clear and not being a slave to a mortgage company.

However, there are many variables involved, not the least of which is how much money you have in savings vs your cost and standard of living.

If you can pay off your balance and still have at least $50,000 for emergencies, it would be a good idea to do so and then take the equivalent of the mortgage payments and put them into savings consistently.

[leastprime]

Originally Posted by mojo101

I have been waiting for the rate hike and moved my money to money market instead of CD 1 1/2 years ago ,all I got is pathetic 0.53%.
And you wonder why people are not motivated to save.

they did the #2 and #3 best things.
#2 paid off debt.
#3 invest in equities and real estate.


I didn't get anything for my savings account.
Maybe the amount cash held yielded "too small for the computer to calculate"