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Yahoo Finance Fed raises interest rates by 0.50%, largest move since 2000
Yahoo News ^ | 5/4/22 | Brian Cheung

Posted on 05/04/2022 1:05:07 PM PDT by EBH

The Federal Reserve on Wednesday raised short-term interest rates by 0.50%, as part of an effort to tamp down the inflationary pressures weighing on Americans.

The central bank suggested that it will further raise borrowing costs throughout this year as it attempts to undo its pandemic-era, easy money policies. The policy-setting Federal Open Market Committee also detailed plans on unwinding its nearly $9 trillion balance sheet.

The decision to raise rates by 0.50% marked the most aggressive increase made in a single meeting since May 2000. Over the last two decades, the Fed has opted to raise interest rates only in increments of 0.25%, with the latest move underscoring the severity that inflation poses at the moment.

“The Committee is highly attentive to inflation risks,” the FOMC said in its updated policy statement.

The Fed is now targeting interest rates in a range between 0.75% and 1.00%, with some Fed officials advocating for raising the target closer to 2.5% by the end of the year.

Fed hikes bleed through the economy in the form of higher interest rates on credit products like credit cards, mortgages, and business loans.

(Excerpt) Read more at finance.yahoo.com ...


TOPICS: Business/Economy; Front Page News; Government
KEYWORDS: badidea; economy; fedrate; interest; interestrates; wrongmove
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1 posted on 05/04/2022 1:05:07 PM PDT by EBH
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To: EBH

How are bonds doing?


2 posted on 05/04/2022 1:07:11 PM PDT by EEGator
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To: EBH

Not sure why DOW is up 932, other than a possible Dead Cat Bounce.


3 posted on 05/04/2022 1:08:37 PM PDT by C210N (Everything will be okay in the end. If it’s not okay, it’s not the end.)
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To: C210N

The stock market is pretty fake at this point.


4 posted on 05/04/2022 1:10:53 PM PDT by Roman_War_Criminal (Jesus + Something = Nothing ; Jesus + Nothing = Everything )
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To: C210N

DOW is up 932 points because the bright boys think this means the fed is serious about inflation. They are wrong. M2 will not be affected by interest hike. As soon as reality sinks in, there will be massive profit taking and probably by Friday’s close this gain will all be gone and then some. IMHO.


5 posted on 05/04/2022 1:12:29 PM PDT by hinckley buzzard ( Resist the narrative.)
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To: Roman_War_Criminal

Black eyes. Just like some of the children born after the jab. Maybe someone can post the pics. I can’t with this phone.

https://youtu.be/F90Cw4l-8NY

And the walls came tumblin’ down....

I’m wondering where these hikes will lead.


6 posted on 05/04/2022 1:14:08 PM PDT by SaveFerris (The Lord, The Christ and The Messiah: Jesus Christ of Nazareth - http://www.BiblicalJesusChrist.Com/)
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To: C210N

The rate hike was expected and already factored in.

My concern is we have negative GDP and they are raising rates. It sounds counter-intuitive and recessionary.


7 posted on 05/04/2022 1:14:13 PM PDT by EBH (Let God Sort Them Out. 1776-2021 May God Save Us.)
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To: EBH

Wall Street is happy there was not a .75% rate hike.


8 posted on 05/04/2022 1:17:31 PM PDT by Huskrrrr (Alinsky, you magnificent Bastard, I read your book!)
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To: SaveFerris

Hyperinflation?


9 posted on 05/04/2022 1:17:41 PM PDT by Roman_War_Criminal (Jesus + Something = Nothing ; Jesus + Nothing = Everything )
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To: SaveFerris

One number to watch—the ratio of government interest payments on the national debt to total tax revenues.

Today that number is 15%.

The rate hikes today will probably kick it up to 20%.

If the interest rate goes to 10% then the ratio hits 100%—all tax revenue goes to pay interest on the national debt.

That is doom territory—no way out—the more you borrow the more insolvent you become—a financial black hole...


10 posted on 05/04/2022 1:19:55 PM PDT by cgbg (A kleptocracy--if they can keep it. Think of it as the Cantillon Effect in action.)
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To: EBH

My concern is we have negative GDP and they are raising rates. It sounds counter-intuitive and recessionary.

We’ve got all that, and double-digit inflation. It’s inflation, wrapped in a recession, and covered with supply chain disruption. It’s an economic turducken.


11 posted on 05/04/2022 1:20:06 PM PDT by Flick Lives (The CDC. Brought to you by Pfizer)
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To: Roman_War_Criminal

I think this is only going to make things worse

Hope I’m wrong


12 posted on 05/04/2022 1:22:10 PM PDT by SaveFerris (The Lord, The Christ and The Messiah: Jesus Christ of Nazareth - http://www.BiblicalJesusChrist.Com/)
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To: Roman_War_Criminal

The rates needed to come up, the issue is the timing. And with negative GDP could cause the recession to hit.

Second reading further down they are talking about “quantitative tightening” of the balance sheet.

We know the Fed is in a real pickle and there is no easy way of doing this. Just hoping they do not crash things...


13 posted on 05/04/2022 1:22:55 PM PDT by EBH (Let God Sort Them Out. 1776-2021 May God Save Us.)
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To: cgbg

One of my major concerns

Thanks for elucidating


14 posted on 05/04/2022 1:23:00 PM PDT by SaveFerris (The Lord, The Christ and The Messiah: Jesus Christ of Nazareth - http://www.BiblicalJesusChrist.Com/)
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To: C210N

Raising the short-term interest rates is a sure ticket to expanding the already burgeoning recession, a painful period that has to be endured before we come out the other side.

Fasten your seat belts, this is going to be a bumpy ride. Jimmy Carter redux.


15 posted on 05/04/2022 1:24:20 PM PDT by alloysteel (There are folks running the government who shouldn't be allowed to play with matches - Will Rogers)
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To: Flick Lives

From the comment section:

Will this move reduce energy price? No. Will it reduce food price? No. Since the inflation was not due to economic expansion (we just had a -1.4% GDP growth, will this move cause a severe recession? You bet.


16 posted on 05/04/2022 1:24:50 PM PDT by EBH (Let God Sort Them Out. 1776-2021 May God Save Us.)
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To: Flick Lives

Biden’s getting the job done as he intended.


17 posted on 05/04/2022 1:25:23 PM PDT by Jim Robinson (Resistance to tyranny is obedience to God.)
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To: cgbg
the more you borrow the more insolvent you become—a financial black hole...

The exact synopsis of fractional-reserve-bankstering, Jekyll Island creation of the FED, and increasingly worthless fiat.

The FED was doomed from the start. Only question is why did it take 100 years for its imminent demise. Oh well, the longer it held out, the harder it will fall.

18 posted on 05/04/2022 1:26:37 PM PDT by C210N (Everything will be okay in the end. If it’s not okay, it’s not the end.)
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To: EBH

The tightening should have been done decades ago. It’s a non-starter now.
They waited two or three years to raise rates.

I’m trying to think of a time similar to this where debt was out of control and people didn’t produce/work and got freebies. The fall of the Roman Empire is all that comes to mind.


19 posted on 05/04/2022 1:26:44 PM PDT by Roman_War_Criminal (Jesus + Something = Nothing ; Jesus + Nothing = Everything )
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To: EBH

They have been stealing our wealth for two decades by setting interest rates ridiculously low - far less than even the pitifully low government manipulated fake inflation rates.


20 posted on 05/04/2022 1:32:43 PM PDT by Iron Munro ( Joe Biden - Inventor Of The First New Language since Esperanto)
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