Posted on 05/04/2022 11:02:27 AM PDT by Tell It Right
The Federal Reserve on Wednesday raised its benchmark interest rate by half a percentage point as the most aggressive step yet in its battle against generational highs in inflation.
Along with the move higher in rates, the central bank indicated it will begin reducing asset holdings on its $9 trillion balance sheet. The Fed had been buying bonds to keep interest rates low and money flowing through the economy, but the surge in prices has necessitated a dramatic rethink in monetary policy.
(Excerpt) Read more at cnbc.com ...
Yes, of course you can but you can’t buy anything with it.
IMHO, the biggest part of the news is the Fed’s treasury purchase drawdown isn’t as big as I expected it to be. (Think small QT instead of big QT.)
The Fed is the problem.
"Biden will tank your 401ks" - Donald J Trump
Won’t stop inflation.
They set up massive inflation over the past decade.
.50 basis points is mouse nuts against 10% annual inflation. As Trump said many times, these are stupid people.
The only solution is Brandon’s Build Back Boondoggle. /s
Oh yes you can......... you can spend it on retirement if you don’t waste it too soon
I compare the Fed to a teenage driver with a car full of beer.
First they hit the accelerator to the floor (the last few years) and then suddenly hit the brakes.
Then they can’t figure out why the car smashed into a tree.
No, but they will continue and just like everything else, look for rates to double.
It’s not enough. Inflation will continue. Interest rates need to be more in the 10% to 20% range to tamp down inflation.
Or we can move back to gold and silver. That’ll fix it too.
The fun starts when they repeat it a few times.
At some point the interest cost on the national debt will exceed total tax revenue.
Then you are in a fiscal event horizon—all over but the screaming as you fall into the black hole.
waiting for an appropriate rise in savings interest rates..
My 401k is shrinking by the day.
I'll have to put off retirement until Trump is back to make America great again.
About the only thing you can say in favor of the Fed hiking rates today and last March is at least this time they didn't wait until a Republican was elected (i.e. Dec 2016 rate hike after Trump's election victory to replace Obama) or the current Dim was soon to be out (i.e. rate hikes from June 1999 through all of 2000 during Bill's last year and a half in office, busting the dot com bubble on whoever followed him).
The most recent time they hiked rates on a Dim prez other than when he was soon to leave office was when they hiked in March 1997 (the start of Bill's 2nd term) before dropping again after that.
https://www.thebalance.com/fed-funds-rate-history-highs-lows-3306135
Agreed. It’s better to hold off on buying a new home until mortgage rates go up, which will deflate housing prices. Yes, you’d have a higher interest rate, but you can refinance a few years later when the Fed inevitably lowers interest rates yet again. However, a high purchase cost can’t be redone later when costs go down.
“If you like your 401k you can keep it.”
Depends on what you have your 401K invested in...
Agreed. I'm actually in a bearish position, none at all in equities. I wish my 401K had more options like a long-term treasury fund. Those are at a good discount now IMHO and tend to rise when stawks crash.
That's how I have much of my other investments like my Roth IRA where I can plug into long-term and intermediate-term treasury funds.
¿Y tú?
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