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re: Trump saying he's not happy about interest rates going up
Posted on 7/19/18 at 12:27 pm to BigAppleBucky
Posted on 7/19/18 at 12:27 pm to BigAppleBucky
quote:
You can have either higher interest rates now, or accelerating inflation later. The Fed believes higher interest rates are less painful.
I tend to agree with them.
The last time we had run away inflation, the fed had to get the fed funds rate (it would be LIBOR now) up to 20% and TBond rates up to 14 or 15%. Nipping inflation in the bud now will be less painful in the long run.
Get out of here with that logic. Everything is designed to troll Trump. That is the only reason to increase rates. Duhhh
Also, I think it's funny that higher rates are automatically bad
My portfolio likes interest. Mortgage rates are locked if you're smart.
This post was edited on 7/19/18 at 12:29 pm
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Posted on 7/19/18 at 12:28 pm to GumboPot
They've been telegraphing gradual rate hikes for a few years now. Obviously this is restrictive monetary policy by default and it was going to happen either way. Powell is basically staying the course. But of course Trump complains like a bitch.
Posted on 7/19/18 at 12:29 pm to seawolf06
quote:
Rising inflation without any wage increases mean the Real Wages will not increase like he was hoping for before the midterms.
yeah, absolutely. But inflation needs to be kept under control, especially if wages are not rising.
Posted on 7/19/18 at 12:29 pm to Lou Pai
quote:
Trump complains like a bitch.
He is maybe the bitchiest Twitter user in history
Posted on 7/19/18 at 12:30 pm to BigAppleBucky
quote:
You can have either higher interest rates now, or accelerating inflation later. The Fed believes higher interest rates are less painful.
I tend to agree with them.
They have economic models with certain inputs to attain a target inflation rate of 2%. The inputs consists of adjusting interest rates, bond purchases or selling to flatten or steepen the yield curve.
Posted on 7/19/18 at 12:32 pm to GumboPot
quote:
It's backed by our military.
That's one theory.
I'd say that our dollar is backed by American debt. Destroy the dollar and lose out on the debt we owe.
Posted on 7/19/18 at 12:33 pm to cahoots
quote:
Wait, doesn't POTUS appoint the entire board and chairman?
Yes, but I don't believe that's a check. And the Fed gives the president a list of nominees. It's not like it's his personal pick. It's just optics. The Federal Reserve controls who becomes chairman.
Posted on 7/19/18 at 12:33 pm to Lou Pai
quote:
But of course Trump complains like a bitch.
Welcome to politics.
Posted on 7/19/18 at 12:35 pm to GumboPot
Posted on 7/19/18 at 12:40 pm to coolpapaboze
quote:
he's levered up the arse.
Sounds like a progressive thing.
Posted on 7/19/18 at 12:46 pm to GumboPot
quote:
Yes, but I don't believe that's a check. And the Fed gives the president a list of nominees. It's not like it's his personal pick. It's just optics. The Federal Reserve controls who becomes chairman.
So you want more government oversight? The Fed is working on behalf of the interests of the federal government and private banks. That seems like something a Democrat would say is why I'm asking
Posted on 7/19/18 at 1:03 pm to GumboPot
quote:
They have economic models with certain inputs to attain a target inflation rate of 2%. The inputs consists of adjusting interest rates, bond purchases or selling to flatten or steepen the yield curve.
It'll be interesting to see what they do about the yield curve soon. While some members of the FOMC may believe that an inversion is no longer a strong indicator of an impending recession, there's a lot of people operating in the markets who still believe it is, and perception can become reality in a hurry when enough people believe.
Posted on 7/19/18 at 1:10 pm to GumboPot
quote:
I lightly perused the Fed's Beige Book last night. It's apparent the Fed language therein is leaning toward rate hikes. That's the only problem with good news, sometimes it's offset with impending higher rates.
In general a "good" economy fricks a ton of people, pretty interesting to be honest.
As a military member my pay is set regardless, doesn't fluctuate based on any outside factors, obviously as interest rates and prices on everyday goods go up, we see more harm than good to our personal financial.
Posted on 7/19/18 at 1:29 pm to Lou Pai
quote:
But of course Trump complains like a bitch.
I bet Trump understands how raising interest rates are a good thing, at the same time he makes this Twitter statement expressing genuine anger at how he has to bear the rising rates, when the previous administration only had to bear one increase.
Posted on 7/19/18 at 1:29 pm to TennesseeFan25
quote:
In general a "good" economy fricks a ton of people, pretty interesting to be honest.
As a military member my pay is set regardless, doesn't fluctuate based on any outside factors, obviously as interest rates and prices on everyday goods go up, we see more harm than good to our personal financial.
Some of those higher interest rates are felt by the military in a positive way. Yearly wage increases, better equipment, better training.
In a good economy, interest rates have a positive as well. It stabilizes markets from demand saturation, particularly good for example, for first-time middle class home buyers.
Posted on 7/19/18 at 1:31 pm to GumboPot
quote:
They have economic models with certain inputs to attain a target inflation rate of 2%.
Why is 2% their target? Wouldn't it be a better strategy to try to keep inflation flat right now? Let wages catch up to at least the past 5-10 years of inflation?
Posted on 7/19/18 at 1:33 pm to Bard
quote:
Why is 2% their target?
You have to keep it away from 0%, as that is where deflation starts and deflation is a killer.
Posted on 7/19/18 at 1:36 pm to brian_wilson
quote:
But inflation needs to be kept under control, especially if wages are not rising.
Posted on 7/19/18 at 1:41 pm to Stingray
quote:
and deflation is a killer.
Not always. I would like to see a little deflation to bring the purchasing power of the Dollar up a bit, especially if oil is going to remain above $50-$60bbl. Of course the better way to raise the value of the USD would be to begin paying down the debt, but that's a whole other topic.
Posted on 7/19/18 at 1:48 pm to Lou Pai
They were artificially low for years.
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