Posted on 03/29/2019 6:04:57 PM PDT by Moonman62
Had the Fed not mistakenly raised interest rates, especially since there is very little inflation, and had they not done the ridiculously timed quantitative tightening, the 3.0% GDP, & Stock Market, would have both been much higher & World Markets would be in a better place!
Those of us who remember being strangled by Volcker in the late 70’s while Carter dithered are happy to have someone who understands the capital markets better then the Fed chairman at the helm of the country.
They did it on purpose to damage Trump.
Look forward to the them doing it again in 2020.
Yield curves are often inverted by over aggressive Fed Boards. The Fed increases, the curve inverts, recessions ensue. Do the math...
Agreed. I don't believe that was a mistake any more than I believe the directors of the CIA and FBI made a mistake when the followed absurd allegations of "collusion" with Russia for three years. The Deep State is fighting back against the duly-elected President of the United States. They think their elitist jobs matter more than the will of the American people. At least with the Fed, this is just a destructive abuse of power, rather than full-fledged treason in in attempted coup.
If a Fed Funds rate of 2.25% is strangling the economy, then it couldn’t have been very robust to begin with.
The punk will do it again in 20. He thinks he is untouchable.
“Those of us who remember being strangled by Volcker in the late 70’s while Carter dithered”
18% mortgage interest rates.
If a Fed Funds rate of 2.25% is strangling the economy, then it couldn’t have been very robust to begin with.
...
The problem is when short term rates are equal to or higher than longer term rates due to the Fed’s manipulation. Rates should be determined by the market, not the elites at the Federal Reserve.
Rates in absolute terms don’t mean much.
Yield curves are often inverted by over aggressive Fed Boards. The Fed increases, the curve inverts, recessions ensue. Do the math...
...
Agreed. I’m glad we have a President who is fighting them with some success.
The Volcker strangle is what finally broke the back of the ‘70s inflation. Reagan supported Volcker’s plan for killing inflation. And it turned out to be more effective than anyone had predicted.
We are in an entirely different situation now. Interest rates are still near historic lows. The Fed needs short rates within a certain range or they don’t have one of their primary recession fighting tools. All that they did is bump short rates up to the lowest part of the range that they need.
“If a Fed Funds rate of 2.25% is strangling the economy, then it couldn’t have been very robust to begin with.”
Don’t spoil the story with facts ‘n stuff. Next you’ll be pointing out that the Fed Funds rate was higher than that in every year of the Reagan boom.
Jerome did a stupid move that caused many companies to decide to not expand.
But there are two other reasons the economy is not overheating:
Labor shortage. Atlanta is tyypical of many Red states and low tax states. The demand for housing far exceeds supply. Construction cannot keep up with demand due to the lack of people willing and able to do construcgtion work.
The demand for people willing and able to do IT far exceeds the supply.
Trade uncertainty. The Trade War has less impact than the labor shortage. But the Trade War creates uncertainty. small young companies can handle risk. But most corporate managers are risk averse.
My 1979 first mortgage rate was 21%.
“Rates should be determined by the market, not the elites at the Federal Reserve.”
Any rates other than Fed Funds and the Discount rate are set by the market. Considering how low long rates are you will have a hard time arguing that there is a shortage of credit.
You must have had some seriously bad credit.
Typical rates were low double digits.
Even near the peak in early 83 I got one for 13%.
Any rates other than Fed Funds and the Discount rate are set by the market.
...
The rates that the Fed sets do manipulate the rates at the short end of the market. The effect is nearly instant.
> If a Fed Funds rate of 2.25% is strangling the economy, then it couldn’t have been very robust to begin with. <
The average Fed Funds rate is around 4.8%. But everyone is getting all worked up about a rate that is less than half of that. So yeah, you might be right.
My point is that the Carter years (followed by Reagan) are strikingly similar to the Obama years (followed by PDJT).
True. More debt and debt added. No cuts in sight.
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