Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Very simplistic view of things. Depends on the product/commodity.
Interest rates tend to almost exclusively impact the commercial sectors of the economy first for a variety of reasons.
Some things, but not everything
The price of many things increasing is proof of Demand-pull Inflation, which the Federal Reserve cannot control or cause or stop.
COVID -19 has caused some reduced productivity, so Supply levels are low, but with Demand remaining constant or increasing, prices naturally rise. That is not Monetary Inflation, but it is Demand-pull Inflation, which the Federal Reserve did not cause, cannot control and cannot stop.
Fuel prices also have an effect costs relative to transportation/delivery of goods and resources. Again, that is Demand-pull Inflation and not Monetary Inflation.
When Demand-pull Inflation exists, you can:
1) Stop freaking consuming, which reduces Demand and lowers prices; and/or
2) Seek substitutes for those things affected by Demand-pull Inflation; and/or
3) Increase Supply or the Rate of Increase of Supply to match Demand and keep prices from rising further or actually lowering prices.
As everyone can plainly see, the Federal Reserve has nothing to do with any of that. It's all you.
Last edited by mathjak107; 04-24-2022 at 04:51 AM..
The price of many things increasing is proof of Demand-pull Inflation, which the Federal Reserve cannot control or cause or stop.
COVID -19 has caused some reduced productivity, so Supply levels are low, but with Demand remaining constant or increasing, prices naturally rise. That is not Monetary Inflation, but it is Demand-pull Inflation, which the Federal Reserve did not cause, cannot control and cannot stop.
Fuel prices also have an effect costs relative to transportation/delivery of goods and resources. Again, that is Demand-pull Inflation and not Monetary Inflation.
When Demand-pull Inflation exists, you can:
1) Stop freaking consuming, which reduces Demand and lowers prices; and/or
2) Seek substitutes for those things affected by Demand-pull Inflation; and/or
3) Increase Supply or the Rate of Increase of Supply to match Demand and keep prices from rising further or actually lowering prices.
As everyone can plainly see, the Federal Reserve has nothing to do with any of that. It's all you.
The Fed isn't the cause of this (fiscal policy is) but they can and will stop it via interest rate hikes. They're always hesitant because it's much easier to trigger a recession but they've already said (for all intents and purposes) that inflation is the greater danger and they'd be willing to force the economy into a recession to get it inflation toward the 2% goal.
Higher interest rates put a damper on demand eventually. The only question is how high of an interest rate is needed in order to minimize the "pain".
My guess is we will tip over in to a recession and the fed will not be able to raise rates like they plan
as well as the bond investors will plow in to bonds bidding rates lower
I think this inflation fear is going to be a head fake as we slow down
I think the red headed step child of investing , long term bonds are going to do surprisingly very well.
A decent recession could see long term rates coming down 1% ..that is about a 26% gain in value on the long bond
Last edited by mathjak107; 04-24-2022 at 12:56 PM..
The Fed isn't the cause of this (fiscal policy is) but they can and will stop it via interest rate hikes. They're always hesitant because it's much easier to trigger a recession but they've already said (for all intents and purposes) that inflation is the greater danger and they'd be willing to force the economy into a recession to get it inflation toward the 2% goal.
Higher interest rates put a damper on demand eventually. The only question is how high of an interest rate is needed in order to minimize the "pain".
Quote:
Originally Posted by mathjak107
My guess is we will tip over in to a recession and the fed will not be able to raise rates like they plan
as well as the bond investors will plow in to bonds bidding rates lower
I think this inflation fear is going to be a head fake as we slow down
I think the red headed step child of investing , long term bonds are going to do surprisingly very well.
A decent recession could see long term rates coming down 1% ..that is about a 26% gain in value on the long bond
Growth already appears to be slowing anyway, so the thought is that we may go into a recession and not even feel it until we are pulling out of it already.
There is no doubt that the stabilized rent increases lag the real rate of inflation. These tenants pay less and less over time in real dollars.
Which is why landlords buy at cents on the dollar when it comes to below market rent rolls .
Or they have special financing terms and tax abatements to build stabilized housing as buildings do not have to be stabilized since I think 1974 on anything new put up .
I was actively invested in the stabilized market place for a long long time .
It can be very profitable
So the lower rents are compensated for . Many times they are greatly compensated .
Especially sponsor apartments in a coop that still have stabilized tenants who didnt buy .
These can be the gold ring for an investor , and an opportunity of a lifetime .
You cant blame tenants …politicians manipulated rents for many years and created this situation of a tale of two cities .
odds are any apartments in a building are going to be stabilized by default unless more than 2700 a month rent.
But that doesn’t mean low rents ..you have stabilized stuff under the various programs at 7k a month for a two bedroom .
My favorite rental the chrystie in manhattan is like that.
It really depends how long the tenant was in the apartment , what the mci increases were over the years as well as the type of stabilization program the apartments are on .
So you can’t generalize that all stabilized rents are below market .
You can get a stabilized apartment in my building but it’s market price today . Plus you are within spitting distance of being destabilized .
Many stabilized apartments will be destabilized with the next round of increases next year .
A two bedroom in many areas is about 2500 if not in a hot area like Astoria or lic .
They will be destabilized pretty soon at 2700 unless part of a special program that allows them to go to market at higher rents like the chrystie
Last edited by mathjak107; 05-06-2022 at 04:41 AM..
How does one get to pay "preferential rent?" Not that I'm complaining, but my landlord gave me "preferential rent" and cut my rent without me even knowing. I never asked for that, but I'm staying quiet and not calling about it
How does one get to pay "preferential rent?" Not that I'm complaining, but my landlord gave me "preferential rent" and cut my rent without me even knowing. I never asked for that, but I'm staying quiet and not calling about it
There is no more preferential rent option .
Preferential rent was when a landlord had trouble filling apartments or he wanted to help a tenant with a temporary lower rent .
Thanks to the 2019 tenant laws once a landlord lowers the rent it isn’t temporary.
That becomes the new level that all increases are based on .
The landlord used to be able to roll the rent back up and then the increases were based on that older higher level , but no more .
Once Lowered it can’t be rolled back ..that is the new level all increases are based on
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
