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Raising interest rates mean more people that won't be able to buy big ticket items like homes, cars and appliances. That mean more people laid off who manufacturer those items and less money being spent by those who want those items but can't afford. Also food and clothing.
Solution: lower gas prices by allowing more drilling, flaking and petroleum pipe lines so gas prices would go down so truckers can deliver those products at a cheaper price. Truckers who have spend $1K to fill their tanks could reduce their cost and pass it down to consumers. Cut regulations that cause higher prices.
The point of raising interest rates is to cause a recession, which lowers inflation.
This is how inflation has been fought for decades.
How did people buy those big-ticket items when interest rates were 18%? And on one income?
They will have to raise them. In this case, inflation is due to government spending. Nothing more. Until a Biden stops the huge deficit spending it will continue. The feds know it. We all know it. Joey has us in some deep chit that is not going to be fun getting out of.
Actually both political parties are guilty of too much spending. Right now republican control the purse strings in the House of Rep.
The point of raising interest rates is to cause a recession, which lowers inflation.
This is how inflation has been fought for decades.
How did people buy those big-ticket items when interest rates were 18%? And on one income?
Recessions results in high unemployment. I think if a remember right those high interest rates were in Jimmy Carter's days and it took Reagan's tax cuts to get us back on track.
So maybe the answer is cut the tax rate not increase it.
I also think moving into a recession right now would be Biden's death wish in the upcoming election.
Recessions results in high unemployment. I think if a remember right those high interest rates were in Jimmy Carter's days and it took Reagan's tax cuts to get us back on track.
So maybe the answer is cut the tax rate not increase it.
The '70's inflation was very much dependent on oil. Carter, then Reagan had Volcker run the Fed. And he raised interest rates precipitously. Recession but eventual recovery in the '80's.
In raising the rates and any comments that have been made about decreases the FED has been very data dependent. The initial expectation was that there would be 3-4 cuts this year with it potentially starting in March or May. As the inflation #'s came in that went out the window. If YOY inflation data remains in the mid 3's, the chances of any real cut outside of potentially one 25bps cut is quite small, especially without weakening in the job market
If we see the YOY inflation get closer to 3% (which we flirted with briefly) or it dips below 3% the chances of seeing a few rate cuts becomes more likely
I have a hunch that they may, and if they do then buyers will likely flood the market to buy while rates are low given there are probably many potential buyers out there who are holding out for rates to drop. The adverse affect is home values will surge once again making it even less likely for the little man to purchase. The little man gets screwed over either way unless more housing inventory comes online, atleast.. housing inventory that is not bought up by a corporation.
I would not be surprised at all if the rates dropped right before the election. Maybe even a couple of times. It's pretty obvious this administration will do anything to get votes, including bringing charges against the opponent to the point that he can't campaign. The situation is absolutely amazing.
As I suspect you know, the rate of inflation is coming down, but the cost of what we pay isn't falling. It's just not rising as fast as it was - the curve is being flattened, but the slope hasn't gone negative yet and probably never will. When Biden says inflation is coming down, he seems to be implying that prices are coming down.
As I suspect you know, the rate of inflation is coming down, but the cost of what we pay isn't falling. It's just not rising as fast as it was - the curve is being flattened, but the slope hasn't gone negative yet and probably never will. When Biden says inflation is coming down, he seems to be implying that prices are coming down.
It all can go negative with recessions and depressions. The last thing we want.
3% or so is no great shakes. Very different than the rates immediately post Covid. Low grade endemic inflation is typical for successful modern economies. And as prices gradually rise, incomes gradually rise, longer term investments make gains, and we all make our own related spending related decisions and adjustments. Everyone's perceived inflation is unique.
But no matter the difference in buying power of one USD today compared to 100 years ago - our std. of living is much better.
A 10% short term jump will cause significant aggravation for many without the means. But one 10% jump is nothing compared to say Argentina. Where they have had persistent 10% and worse monthly.
And yet they are still here....
Do you really believe that the richest and most powerful people in the world meet in secret to discuss and agree on things that will benefit you?
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