• This is a political forum that is non-biased/non-partisan and treats every person's position on topics equally. This debate forum is not aligned to any political party. In today's politics, many ideas are split between and even within all the political parties. Often we find ourselves agreeing on one platform but some topics break our mold. We are here to discuss them in a civil political debate. If this is your first visit to our political forums, be sure to check out the RULES. Registering for debate politics is necessary before posting. Register today to participate - it's free!

Federal Reserve raises key interest rate 0.75% in ongoing inflation fight

Moon

Moon

Why so serious?
DP Veteran
Joined
Jan 2, 2009
Messages
17,912
Reaction score
10,809
Location
Washington State
Gender
Male
Political Leaning
Conservative
The Federal Reserve hiked its key interest rate by 0.75% for the third time in a row as it races to get ahead of galloping inflation that is sapping the earnings of American consumers.

Earlier this month, the Bureau of Labor Statistics reported inflation had climbed by 8.3% year on year and 0.1% month on month. Both figures came in higher than analysts expected, raising fears that inflation is becoming entrenched.

The essence of the problem is that demand in the economy is still too high amid a global supply crunch. Thanks to restrained spending during Covid lockdowns and federal stimulus plans, consumers found themselves flush with cash as the economy began to reopen. Meanwhile, Covid supply chain issues lingered, and Russia's invasion of Ukraine dampened access to both food and energy in other parts of the world.

So, the Fed is seeking to bring demand back in line with supply. By raising interest rates, the Fed hopes to rein in consumption and borrowing, which in turn should put downward pressure on prices. However, this will come at the cost of a slowing economy.

https://www.nbcnews.com/business/ec...aises-interest-rates-september-2022-rcna48334

—————

As expected, but it’s still going to cause pain for a lot of people.
 
Yea, but the real surprise is the Fed's dot-plot and forward projections being much more aggressive and negative than anticipated. Their projection for a return to normal inflation is 2025, great....

Anyone still think this is a soft landing? lol.
 
Moon said:
The Federal Reserve hiked its key interest rate by 0.75% for the third time in a row as it races to get ahead of galloping inflation that is sapping the earnings of American consumers.

Earlier this month, the Bureau of Labor Statistics reported inflation had climbed by 8.3% year on year and 0.1% month on month. Both figures came in higher than analysts expected, raising fears that inflation is becoming entrenched.

The essence of the problem is that demand in the economy is still too high amid a global supply crunch. Thanks to restrained spending during Covid lockdowns and federal stimulus plans, consumers found themselves flush with cash as the economy began to reopen. Meanwhile, Covid supply chain issues lingered, and Russia's invasion of Ukraine dampened access to both food and energy in other parts of the world.

So, the Fed is seeking to bring demand back in line with supply. By raising interest rates, the Fed hopes to rein in consumption and borrowing, which in turn should put downward pressure on prices. However, this will come at the cost of a slowing economy.

https://www.nbcnews.com/business/ec...aises-interest-rates-september-2022-rcna48334

—————

As expected, but it’s still going to cause pain for a lot of people.
Click to expand...
Sorry chumps. America asked for Biden's reckless and cost prohibitive agenda and now its time to shut up and pay up.

Embrace the suck
 
The US is still doing better than most other countries....by a lot.
 
bave said:
Yea, but the real surprise is the Fed's dot-plot and forward projections being much more aggressive and negative than anticipated. Their projection for a return to normal inflation is 2025, great....

Anyone still think this is a soft landing? lol.
Click to expand...

I never thought we could get inflation out of the system quickly. Too much corporate profit in it.
 
Moon said:
The people who will feel the impact of an interest rate increase the most won’t really be worried about what’s going on in other countries.
Click to expand...
I understand all of that. They also will not know that this is a worldwide problem and not a political one. Most will have no clue as to what is causing this because it is not front of mind for them, I get that but it doesn't change the fact that this is not a political problem and those trying to tell them it is are using them for their own political gain.
 
Callen said:
I understand all of that. They also will not know that this is a worldwide problem and not a political one. Most will have no clue as to what is causing this because it is not front of mind for them, I get that but it doesn't change the fact that this is not a political problem and those trying to tell them it is are using them for their own political gain.
Click to expand...
That’s the nature of politics.
 
Good. We need to keep raising rates until inflation is under control. We can't take our foot off the brake too early.
 
Moon said:
The Federal Reserve hiked its key interest rate by 0.75% for the third time in a row as it races to get ahead of galloping inflation that is sapping the earnings of American consumers.

Earlier this month, the Bureau of Labor Statistics reported inflation had climbed by 8.3% year on year and 0.1% month on month. Both figures came in higher than analysts expected, raising fears that inflation is becoming entrenched.

The essence of the problem is that demand in the economy is still too high amid a global supply crunch. Thanks to restrained spending during Covid lockdowns and federal stimulus plans, consumers found themselves flush with cash as the economy began to reopen. Meanwhile, Covid supply chain issues lingered, and Russia's invasion of Ukraine dampened access to both food and energy in other parts of the world.

So, the Fed is seeking to bring demand back in line with supply. By raising interest rates, the Fed hopes to rein in consumption and borrowing, which in turn should put downward pressure on prices. However, this will come at the cost of a slowing economy.

https://www.nbcnews.com/business/ec...aises-interest-rates-september-2022-rcna48334

—————

As expected, but it’s still going to cause pain for a lot of people.
Click to expand...
Unnecessary. They are going to cause the very recession they are predicting.
 
poweRob said:
Unnecessary. They are going to cause the very recession they are predicting.
Click to expand...
Good, we will probably need a short, mild recession to get inflation under control.
 
Whew, this is going to risk a housing collapse, we'll see how it goes. House prices were getting out of hand anyway.
 
VySky said:
Sorry chumps. America asked for Biden's reckless and cost prohibitive agenda and now its time to shut up and pay up.

Embrace the suck
Click to expand...

It's really more like the decline of the Fed's ability to call balls/strikes without fear of angering the president or congress. Volcker had the balls to raise inflation to double digits back in the late 1970s and early 1980s, in part because politicians let him do his job. And it basically worked. From 2009 to 2015 or so, rates were near 0.
 
Callen said:
The US is still doing better than most other countries....by a lot.
Click to expand...
Who gives 2 cents about comparing America to other countries. Before socialism came to our shores there never was a comparison because everyone wanted to be Americans. Now only low life’s from south of the border think we have anything to offer. And for them, it’s open borders.
 
Ikari said:
Whew, this is going to risk a housing collapse, we'll see how it goes. House prices were getting out of hand anyway.
Click to expand...

It's going to revalue equities, which is long overdue. And yes, the over-inflated housing market will enter a strong correction, which is also overdue. Cheap interest rates seems great, but when combined with low taxation, it really just encourages economic activity that's not based on reality. It overvalues the stock market, makes executives handsomely rich, and then they start putting money into things like property, so much so that middle class families can't buy homes b/c they get beaten by cash offers. The Fed has taken what seemed like a bleeding heart approach to economics and actually created an environment that has caused inequality to explode to levels not seen since around, oh, 1913...the year the Fed was created.
 
VySky said:
Who gives 2 cents about comparing America to other countries. Before socialism came to our shores there never was a comparison because everyone wanted to be Americans. Now only low life’s from south of the border think we have anything to offer. And for them, it’s open borders.
Click to expand...

You're not racist or anything...
 
multivita-man said:
It's going to revalue equities, which is long overdue. And yes, the over-inflated housing market will enter a strong correction, which is also overdue. Cheap interest rates seems great, but when combined with low taxation, it really just encourages economic activity that's not based on reality. It overvalues the stock market, makes executives handsomely rich, and then they start putting money into things like property, so much so that middle class families can't buy homes b/c they get beaten by cash offers. The Fed has taken what seemed like a bleeding heart approach to economics and actually created an environment that has caused inequality to explode to levels not seen since around, oh, 1913...the year the Fed was created.
Click to expand...

The housing market absolutely needs correcting. The prices have been so inflated that the low mortgage rates are irrelevant to most people. They can't afford the home or the down payment, and they are, as you noted, getting killed by people who come in with a full cash offer.
 
VySky said:
Nothing racist about it. They are thumbing their nose at America
Click to expand...
Quite the opposite but I know that is not something you can comprehend.
 
tres borrachos said:
The housing market absolutely needs correcting. The prices have been so inflated that the low mortgage rates are irrelevant to most people. They can't afford the home or the down payment, and they are, as you noted, getting killed by people who come in with a full cash offer.
Click to expand...
And those people who have the cash are coming from California where selling sends you out of state with the needed capital to buy a house out right in many areas
 
You must log in or register to reply here.
Back
Top Bottom