Economy 39,624 Posted January 26 Share Posted January 26 https://www.bnnbloomberg.ca/stocks-slide-as-powell-talks-up-outlook-for-rate-hikes-1.1713333 US Central Bank (Federal Reserve) chairman Jerome Powell said interest rate hikes starting in March to fight highest inflation in decades is likely Jerome Powell also suggested they may hike rates every meeting for the rest of the year meaning rates would go up several times this year likely by 25 basis points (0.25%) each time Link to post Share on other sites
bionic 26,069 Posted January 26 Share Posted January 26 Didn't Biden say inflation was a good thing just the other day? buy bionic Link to post Share on other sites
TylerBR97 15,000 Posted January 26 Share Posted January 26 3 minutes ago, bionic said: Didn't Biden say inflation was a good thing just the other day? He can say whatever the **** he wants but these interest rates NEED to start going up. I want to buy a house already. The prices are disgustingly gross. REQUEST PERFECT ILLUSION FOR ROCK BAND 4 http://www.harmonixmusic.com/games/rock-band/request/ 1 1 Link to post Share on other sites
Economy 39,624 Posted January 26 Author Share Posted January 26 (edited) 4 hours ago, bionic said: Didn't Biden say inflation was a good thing just the other day? He was definitely being sarcastic lol Tho i wouldnt be surprised if part of the government wants it. Its a way to reduce the real value of debt they have to pay. Its still a tax but u dont see it. They essentially are taxing ppl with savings because savings reduce in relative value along with the debt... Its also a tax on investors that bought government bonds by paying them back less than they borrowed. That includes most ppls pension funds so that tax hits ordinairy ppl too But its not a literal tax u see so trying to inflate debt away is a sneaky way to reduce debt load. It also can backfire in a number if different ways if high inflation is sustained 4 hours ago, TylerBR97 said: He can say whatever the **** he wants but these interest rates NEED to start going up. I want to buy a house already. The prices are disgustingly gross. Tbh. Rates have been at rock bottom lows for 12 years now. Enough already. Forget inflation, the distortions its creating in capital allocations alone is reason enough The distortions created by prolongued low interest rates are already creating inequality and making wealth gaps worse Edited January 27 by Economy 1 2 Link to post Share on other sites
PartySick 94,483 Posted January 26 Share Posted January 26 21 minutes ago, Economy said: He was definitely being sarcastic lol Tho i wouldnt be surprised if part of the government wants it. Its a way to reduce the real value of debt they have to pay. Its still a tax but u dont see it. They essentially are taxing ppl with savings because savings reduce in relative value along with the debt... Its a tax on investors that bought government bonds by paying them back less than they borrowed. That includes most ppls pension funds so that tax hits ordinairy ppl too But its not a literal tax u see so its a sneaky way to reduce debt load Tbh. Rates have been at rock bottom lows for 12 years now. Enough already. Forget inflation the distortions its creating in capital allocations The distortions created by prolongued low interest rates are already creating inequality and making wealth gaps worse I just love reading you talk about things I don't understand Tell me more about interest rates going up The remix 7 1 Link to post Share on other sites
Taylucifer 4,063 Posted January 26 Share Posted January 26 gonna increase minimum wage too? go stream Red (Taylor's Version) 1 Link to post Share on other sites
Economy 39,624 Posted January 26 Author Share Posted January 26 8 minutes ago, PartySick said: I just love reading you talk about things I don't understand Tell me more about interest rates going up Ok 😄 Higher rates and therefore higher cost if borrowing reduce money creation by making loans more expensive so it reduces how much ppl and businesses can afford to borrow It also encourages ppl to save more cuz u get more money on things like savings accounts and GICs. That money #1 also comes out of general circulation when its just sitting saved and it also #2 reduces demand for goods and services It especially affects asset inflation cuz real estate and equites REALLY thrive on cheap money Most importantky is about controling demand because Inflation usually tends to rise when economy is overheating meaning there isnt enough productive capacity to supply the demand of consumption so companies start to raise prices. At this stage wages also rise cuz companies have to compete for labor but productivity per worker has to go up also (which it tends to anyway when labor market is tight) otherwise all of the wage gains just get lost to inflation Thing is if the economy overheats too quickly prices rise too quickly for the benefits of higher demand to be fully felt like investments to improve productivity not to mention it can create other instabilities or unsustainable booms In short When unemployment is low and theres not many ppl left to hire factories and service sector is producing all it can at its maximum capacity economists call that an economy at full capacity without slack left. If demand exceeds the productive capacity that it called "overheating", supply cannot be met so u just get inflation. A small amount if overheating can be good as it forces companies to find ways to be productive (thus increasing capacity in the first place) and higher wages also encourage more to join workforce which also adds to capacity. But because this takes time, too much overheating too quickly will just get u high inflation and an unsustainable boom quickly followed by a bust and few benefits were felf. Its not worth it to overheat an economy so when an economy starts to overheat they raise rates which keeps demand and inflation in check Other things of course also affect inflation. In the current circumstances that includes higher energy prices and supply chain disruptions. Rates do very little about those factors 1 1 Link to post Share on other sites
Economy 39,624 Posted January 26 Author Share Posted January 26 7 minutes ago, Taylucifer said: gonna increase minimum wage too? With inflation this high they frekin better But thats not the Central Banks department. They exclusively handle only currency, and monetary policy such as interest rates and money supply Link to post Share on other sites
Taylucifer 4,063 Posted January 27 Share Posted January 27 52 minutes ago, Economy said: With inflation this high they frekin better But thats not the Central Banks department. They exclusively handle only currency, and monetary policy such as interest rates and money supply Biden, we are looking at you then go stream Red (Taylor's Version) 1 Link to post Share on other sites
Economy 39,624 Posted January 27 Author Share Posted January 27 30 minutes ago, Taylucifer said: Biden, we are looking at you then Too bad some States are kinda refusing to take matter to their own hands States setting an appropriate level for their economies is preferable to having a National minimum that is the same in Kansas to California and NYC when the cost of living is not even remotely the same 1 Link to post Share on other sites
Mr Mendes 1,357 Posted January 27 Share Posted January 27 1 hour ago, Taylucifer said: Biden, we are looking at you then He certainly could and would likely make the moves to actually do it without those two standing in the way 1 Link to post Share on other sites
pachinko 6,954 Posted January 27 Share Posted January 27 So should I buy a House now or wait? Link to post Share on other sites
Economy 39,624 Posted January 27 Author Share Posted January 27 17 minutes ago, pachinko said: So should I buy a House now or wait? I dont know ur personal life circumstances and also dont know what market u live in so i cant really give u advice? As a general rule tho higher rates help prevent home price increases and in some cases even trigger falls (it played a roll in the realestate crash that started in 2007 in US among other factors) but it also makes ur mortgage rates higher I suppose higher rates but lower principal are more attractive when u have a bigger downpayment! Link to post Share on other sites
artdoll 17,330 Posted January 27 Share Posted January 27 3 hours ago, PartySick said: I just love reading you talk about things I don't understand Tell me more about interest rates going up ♫ 👏 A-P-P-L-A-U-S-E, make it real loud 👏 ♫ 2 Link to post Share on other sites
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