I was expecting a 1.00% increase. Fed unleashes another big rate hike in bid to curb inflation | AP News We are having stagflation at the highest level in 41 years, and this is the best the fed can do: .25% March 16 .50% May 4 .75% 6/15 .75% 7/27 It's going to take much higher interest rates to tame this ugly inflation/recession two-headed monster. Inflation last reported at 9.1% will likely at least in part shrug off the higher rate and it is far from enough to bring down inflation significantly. To really hit inflation hard and to get this over with quickly, rates have to be much closer to the inflation rate. Otherwise, this stagflation we are in now is going to linger for several more years. This also presumes that the federal government can control itself fiscally. So far, Joe Manchin is all that stands in the way of another $1+ trillion-dollar spending bill. As an added bonus this week, we will find out definitively tomorrow that the US GDP has shrunk for two consecutive quarters. No, of course, it's not a recession, until it happens to you. The next federal reserve consideration for a rate hike comes on September 21. If we get another very high inflation report for July reported in August, I would not be surprised if we get an unscheduled increase in August, but I'm not predicting it. I did predict a 1.00% increase for today, but that didn't work out.
Pretty sure he'll vote for the next defense budget along with most of the Senate U.S. Congress moves to boost Biden's record defense budget
When you factor in the potential change over the course of the year it will be pretty substantial. Given much of the increase (but not all) is supply based from Covid and Ukraine war I think a gradual approach is appropriate. A shock and awe approach could crash the system with inability to support higher debt service costs. The deficit has come down quite remarkably. Deficit Tracker | Bipartisan Policy Center
There was argument .75 was too high and that it might be .5. There are plenty of signs that core inflation is cooling. Might want to check what "stagflation" means
Really? Two consecutive quarters of negative GDP growth, hyperinflation for basic goods and services June over June, and a job market with less people working than in January 2020 is the tipoff to me. Yeah, you are right though. Fresh corn here went down from .75 an ear to .69 an ear. I saw only arguments between .75% and 1.00%. I was predicting 1.00% as rates are entirely too low with the late start to fighting inflation by the federal reserve. The feds believed all of the transitory and soft-landing views you are pushing until it was too late. We are way past a soft landing happening now.
I will respond once. Staglation is not a defined NBER term but all colloquial definitions require high unemployment, a derivative of Phillips Curve or NAIRU discussions. That is all
Argue fair, don't put words in my mouth. Unlike your party, I think all excessive federal spending is inflationary. Democrat members in congress apparently haven't realized you can't keep printing money without the offsetting inflationary increases. It's bad enough that the federal government only cuts increases and never the budget, but to spend like a drunken sailor on Saturday night is insane.
I learned some things today. Thanks for your post. The NAIRU, explained: why economists don't want unemployment to drop too low
There are numerous definitions that support my views. NBER is a joke. They will admit the US is in recession when it is so obvious that even you can't deny it. Keep your promise, don't respond.
Corn is not the only price that is dropping. Gas prices has been dropping for six straight weeks now. So have the prices of shipping containers, meaning anything manufactured overseas will likely not be seeing any price increases. The Fed rate increase will also slow down inflation. Expect the August report on inflation to look nothing like the July one, in my opinion. And funny a poster who supports Trump and says he finds all unnecessary spending to be inflationary. What do you think about Trump's spending that increased the national debt by $7.8 trillion? And that's before any COVID stimulus! Know what else is inflationary? Supply shortages, including shortages in labor. What do you think of the fact that Trump's policies lowered the number of legal immigrants by 2 million, which has contributed to current labor shortages?
Yeah, the deficit for the first 6 months of 2022 is far lower than it was in the first 6 months of 2019, pre-pandemic when Trump was president. It's not even close.
I will agree that the Democrats are generally terrible at fiscal restraint when they control all branches of govt. but let’s not forget Trump had the highest peacetime / prosperity deficits as a percent of GDP, perhaps ever, and that is before Covid. Plus Trump put a lot of Covid stimulus money in the hopper too - he started it and Democrats doubled down on it.
Republicans and democrats can be equal opportunity spenders, just usually different things. The difference is that at no time in Trump's 4 years did inflation exceed 2.8%. If anything, the federal reserve was quick to raise rates and then slow lowering rates effectively taking away the punch bowl a bit too soon, none of this transitory business. With inflation at 9.1% and a slowing economy, it should be impeachable to spend more on big new bills or to raise taxes. It could get really ugly if that were to happen.
Inflation was here before the war in Ukraine... That war does NOT change a thing. Unless of course we send them $40 billion or more in money/aide that we do NOT have to give/spend. Covid however is a problem, and we still have people that got fired and have not returned to work because of companies' refusal to let them return without the jab. Add in the upcoming California trucker, and railroad strikes.... It's one big mess.
