Posted on 07/27/2022 11:08:57 AM PDT by entropy12
The Federal Reserve on Wednesday raised interest rates by 75-basis points for the second-straight meeting as the need for speed to move monetary policy to a restrictive stance to curb above-trend inflation persists.
The Federal Open Market Committee raised its benchmark rate to a range of 2.25% to 2.5% from 1.5% to 1.75% previously.
In support of its goals - to achieve maximum employment and inflation at the rate of 2 percent over the longer run - the Fed said it "anticipates that ongoing increases in the target range will be appropriate."
In the weeks leading up to the decision, bets on a much larger rate hike had gripped investor attention following data showing inflation hit a fresh four-decade high last month.
But Fed members quickly downplayed the need for a much larger hike, saying that a 0.75-point increase would be appropriate to keep the central bank on its path to move to a restrictive stance to bring down elevated inflation pressures.
(Excerpt) Read more at investing.com ...
Enjoy your new credit card payments folks.
Part of the re-definition of recession/depression.
2.25% is going to crush that 9% inflation!
2.25% to 2.5% federal funds rate is no where near enough to kill 9.1% inflation.
You and me think alike.
I wonder when banks will start paying decent interest on savings accounts...
well, I can dream....
I wouldn’t argue against your point, but the truth is, people
are going to feel it as the interest rates based on the
prime rate go up up up.
It’s just a transition..........................
Let’s see what Powell says at his 2:30p presser.
We both can...
Yep, it would be painful for some but a 10% or more increase is what’s needed.
Servicing the interest on the national debt just got more expensive.
That is true. Buying cars or house just got more expensive.
But it is like taking bitter medicine when sick. It is better to get cured fast than drag on with the disease.
Previous high inflation started with Nixon admin and ended in Reagan admin. It was going on and on for years. When FED jacked up interest rates to double digits, inflation bubble was deflated quickly, and the economy took off.
Only new national debt. Most previous 1-5-10-30 year treasury bonds were sold at FIXED interest rates. Only inflation adjusted bonds will require higher service fees.
Recessions usually last only short term. Inflation damage can go on for decades. (Nixon-Reagan previously).
” Buying cars or house just got more expensive.”
Ten year treasury rate down today to 2.76%.
So many of today’s Yoots have never experienced anything but near zero interest rates, it’s always been almost free money since they were born.
Us old curmudgeons, especially brought into family businesses, learned from grade school up about a stronger Dollar verses Yens, Pounds or Marks and when to invest in German equipment vs. Japanese or Swiss. Interest rates were a huge discussion when you had revolving credit to cover your late AP accounts as well.
Now there’s buildings full of “business” people that about crap when they are forced to pay 4+% on a mortgage, and don’t get me started on the suckers who opted for the even cheaper floating mortgage rates they chose to save a few bucks up front.
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