Inflation is over guys, prices are stable now and everything is totally fine. Nothing to see here yall!
Would you prefer they keep rates high? Inflation has dropping pretty consistently for months and was 2.5% y/y last month. Food price inflation was even lower y/y. What action would you prefer the Fed take?
That’s the thing, it’s Congress being a limp dick that forces the Fed to fight inflation with rate raises that inevitable ends hurting workers.
If the inflation induced by the monopolization of key industries and pure greed would have been addressed by legislative action restoring the free market and clawing back windfall profits through smart taxation, people would be better off and would not be looking to elect a fascist.
The “Fed only has this one tool” situation is a false dilemma. Inflation is not the root problem, the oligarchy is.
Rates are not high. 20 years ago they were higher yet - and people are cheering the historically low rates. However if you don’t remember 20 years ago it is easy to think they are high now when in fact they are probably closer to normal.
Do you mean 25 years ago? Twenty years the rate was around 1%. Back in July of 2000 it went up to about 6.5%. But inflation was on the rise at that point. It has sharply declined now.
Honestly I think the rate should’ve dropped by 2 or 3 whole percentage points (so like 200 or 300 basis).
The current rates are OBSCENELY HIGH and have not halted inflation even if they have attenuated it to some extent.
The Fed likely knew this damage would occur from this kind of tampering and only now are they acting to curb it.
They’re not obscenely high, they’re obscenely high for our lifetimes, I grew up in the 80s and these are adorable.
But I actually agree with you, our economy has a lot of really f-d up things because we lived on free money so long, we needed to wean slower because otherwise really, REALLY bad things were going to happen (SVB was the tip of the iceberg).
Good news and it points to the idea that Canada will drop .5 at their next meeting. Inflation in Canada is down to 2%>
I personally agree with some people that a .25 drop would be more prudent but I understand and accept a .5 drop should it happen. It seems like the worst is over now it’s a matter of sticking the landing.
Free money is coming back!
Yeah, there is a bigger push since most those countries are variable rates for more of their sectors. Their interest rates are always quicker to adjust. I’ve been paying 2.4 on my home and .4 on my car for the past 3 years. I’m just not getting new credit.
Consensus is that the variable rate model is overall cheaper but the fixed rate model reduces risk and encourage growth.
I’ll wait a year or two for the rates to fully catches l catch up and enjoy not having my mortgage payment jumped up $600 for the past 3 years tyvm.
Jerome Powell looks pretty stringy, but I bet I can grind him up into cat food.
