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Are you speaking of the economy or the stock market performance? Higher rates have been warranted for years based on economic numbers.
This is correct. During Obama's term, we saw continual economic growth and improving employment numbers and the FED stood pat for the most part. During Trumps term, the FED finally started increasing rates, buy only in .25 increments. Historically, the FED has been much quicker to raise rates and in higher increments, when it's warranted. My guess is the FED has been politically influenced.
it has nothing to do with borrowing above means . to us mortals higher rates on mortgages , goods , services and auto's is like a tax . it means we can no longer spend that money on other things .i don't know about you but i prefer to spend what i have on my loved ones and causes i choose not give it to bankers
This is right. For the Average American higher rates mean higher costs. Few Americans have enough invested or sitting in cash to benefit from rate increases over what they pay on their debt
I actually like low interest rates. I'm getting a new roof on our house next week. Instead of taking the money out of our brokerage accounts, I just wrote a convenience check for $13,000 on a credit card. 0% for 15 months with a flat $200 fee. Seemed pretty cheap to me for using other people's $ for 15 months.
I actually like low interest rates. I'm getting a new roof on our house next week. Instead of taking the money out of our brokerage accounts, I just wrote a convenience check for $13,000 on a credit card. 0% for 15 months with a flat $200 fee. Seemed pretty cheap to me for using other people's $ for 15 months.
The economy is growing fast and unemployment is very low. The FED must step in at some point to slow it down or there is the distinct possibility of rampant inflation.
It's nice to see a slightly more responsible Fed chair ignoring wall street & continuing to raise rates so when the next recession hits the fed will have levers to press. Rates need to be much higher and should have been raised much sooner to curb these over-valuations.
Yes and we better raise taxes as we will be hard pressed to pay the interest on the debt when rates get back to "normal"
Wa are witnessing 17 years (since 2001) of complete insanity and manipulation of interest rates in order to keep the old world alive, protecting the status quo, protecting the old debt with new debt as a solution to our DEBT PROBLEM.
DEBT like everything in the universe, expands and contracts, wakes up and sleeps, advances and then declines. The FED idea that we can protect debt from the ravages of sleep, contraction, deflation will ultimately bankrupt us. The FED idea that growth is eternal is the problem. Economic growth is periodical and, as such, there always comes a time to 'pay the piper' or, in other words, to reduce debt = higher interest rates = recession = deflation.
We should start reducing debt back in 2001 and reward saving, not speculations and borrowing. Business Cycle ended in 2001 and Non-Growth Cycle started the same year. It is insane to encourage more debt (more aggregate demand) during the Non-Growth Cycle. It is like continuing to fertilize the garden after they have already given their fruit: you get no growth except in the cancerous growth of asset bubbles as we have seen over the last 17 years.
The FED experiment in perpetual growth delayed another Great Depression from 2001-PRESENT. And at what cost? Pushing interest rates to zero for decades sucked all the world's money into asset bubbles where it now wits precariously - a crash will wipe out not only all the world's money but also all the money seduced by low rates into record debt margins. We not only have all our money invested but also all the money we could borrow. In the precarious asset markets - which the FED (and CB's) now must protect or face the destruction of civilization as we know it.
All to avoid what I think is the necessary Night Cycle Deflation. All these "aggregate demand" stories are just the greed and growth storie dressed up in newer nicer vocabulary. THE FACT IS, AGGREGATE DEMAND NEEDS TO GO SLACK DURING DEFLATION CYCLES so we can reduce prices again so we can afford housing again and afford education and basic health care. Not only are asset markets in a bubble, so are the basic costs of living. Of course we like keeping these prices propped up if we own a house, if we've finished our education, and if we have insurance - someone else paying for our healthcare. But what we really need is a world with prices low enough so that we can afford to pay for our own healthcare.
The FED made a deal with the devil and has been tricking Americans into more debt all those years. They cannot raise rates to the point that it becomes dangerous to the Asset Bubbles they have created. Should they? That is a different issue. Will they? That is the primary issue. The FED is a political being.
Wa are witnessing 17 years (since 2001) of complete insanity and manipulation of interest rates in order to keep the old world alive, protecting the status quo, protecting the old debt with new debt as a solution to our DEBT PROBLEM.
DEBT like everything in the universe, expands and contracts, wakes up and sleeps, advances and then declines. The FED idea that we can protect debt from the ravages of sleep, contraction, deflation will ultimately bankrupt us. The FED idea that growth is eternal is the problem. Economic growth is periodical and, as such, there always comes a time to 'pay the piper' or, in other words, to reduce debt = higher interest rates = recession = deflation.
You identified the problem correctly, but not the perpetrator. The Fed is not responsible. The government is, and at a time when taxes should be hiked to reduce the debt during a period of economic recovery, the moron in chief is doing the opposite.
This is right. For the Average American higher rates mean higher costs. Few Americans have enough invested or sitting in cash to benefit from rate increases over what they pay on theirdebt
Maybe that's the problem, which again I have little sympathy for.
Great post C2BP! Used responsibly rate manipulation serves a purpose- raise rates during growth/ expansion cycles and lower during contraction, non growth cycles.
I am not a political person but I do applaud politicians that do unpopular things to better the country despite re-election prospects. I know no one wants to get into a trade war but sometimes if the deal is not equitable you have to put your foot down or you will continue to be on the loosing end- you have to go thru a little hell to get to heaven sort of speak. Same with Fed policy-
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