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There's an argument to be made that if you cant raise rates much above the incredible low rate this far into a recovery, then your economy has bigger problems t

There's an argument to be made that if you cant raise rates much above the incredible low rate this far into a recovery, then your economy has bigger problems to deal with. Without denying your statements of the power the Fed has, I havent seen anything odd about the timing, frequency, nor quantity that the fed has raised rates lately. You didn't address the argument of the quote you made (that the rate needed to raise) nor did you supply evidence to support your implication that the fed was willing to tank the economy to hurt Trump.

disgruntledphd2 8y ago
Like, I don't really get why people are so worried. Wages are going up, employment is going up, and the price of assets are coming down. This is pretty good for most of the population. It's really only the small fraction (of which I am a member) that have equities that have really lost anything. Inflation is still reasonably low, so PPP is going up. I just don't get it. Mind you, a few years back I didn't really understand how unemployment was bad, wages were poor, asset prices were too damn high and everyone was talking about this "recovery". I probably just don't understand macroeconomics, I guess :)
- charlesdm 8y ago
  Prices of assets coming down means margin debt gets called, and investment loans secured by, for example, shares as collateral, leading to defaults and ultimately to bankruptcy of companies with sizeable amounts of debt on its balance sheets. Now, the argument might be that it's their own fault, but that will likely leads to tens of thousands of jobs lost. And we're not talking tech jobs.
- OGMayo46 8y ago
  > Wages are going up, employment is going up, and the price of assets are coming down Huh? Sources?
  - josefresco 8y ago
    Most likely, OP was referring to reports like this: https://www.bloomberg.com/news/articles/2018-02-02/u-s-added-200-000-jobs-in-january-wages-rise-most-since-2009 https://www.bloomberg.com/news/articles/2018-02-02/u-s-added... I'm not agreeing with the point, was just curious like you and searched.
  - phildawes 8y ago
    https://tradingeconomics.com/united-states/wages https://tradingeconomics.com/united-states/wages https://tradingeconomics.com/united-states/employment-rate https://tradingeconomics.com/united-states/employment-rate https://tradingeconomics.com/spx:ind https://tradingeconomics.com/spx:ind
- zozbot123 8y ago
  It's not clear what you mean by "assets". Stock prices tend to reflect growth expectations, so higher prices today imply that real incomes are expected to increase. Other assets are almost the other way around - they increase in price when future interest rates are expected to be lower, which is associated with stagnation and lower growth. (The latter is why the argument in the article does not even wholly makes sense, IMHO. You don't raise rates in order to get some "room" to slash them in the future; you do it because if you don't, and market rates of return ("natural" rates) are trending higher due to improved growth, inflation will eventually spiral out of control. It's a bit like trying to balance a pencil on your hand, and keep it from falling.)
- normal_man 8y ago
  Even if wages are "going up" over the last year or whatever, they have been largely stagnant over the long term in the face of skyrocketing corporate profits. It's a problem 30 or more years in the making and it will come to a head. Look at the recent tax "reform;" we aren't any closer to fixing this, in fact we're accelerating the other way

disgruntledphd2 8y ago

Like, I don't really get why people are so worried. Wages are going up, employment is going up, and the price of assets are coming down. This is pretty good for most of the population. It's really only the small fraction (of which I am a member) that have equities that have really lost anything. Inflation is still reasonably low, so PPP is going up. I just don't get it. Mind you, a few years back I didn't really understand how unemployment was bad, wages were poor, asset prices were too damn high and everyone was talking about this "recovery". I probably just don't understand macroeconomics, I guess :)

charlesdm 8y ago
Prices of assets coming down means margin debt gets called, and investment loans secured by, for example, shares as collateral, leading to defaults and ultimately to bankruptcy of companies with sizeable amounts of debt on its balance sheets. Now, the argument might be that it's their own fault, but that will likely leads to tens of thousands of jobs lost. And we're not talking tech jobs.
OGMayo46 8y ago
> Wages are going up, employment is going up, and the price of assets are coming down Huh? Sources?
- josefresco 8y ago
  Most likely, OP was referring to reports like this: https://www.bloomberg.com/news/articles/2018-02-02/u-s-added-200-000-jobs-in-january-wages-rise-most-since-2009 https://www.bloomberg.com/news/articles/2018-02-02/u-s-added... I'm not agreeing with the point, was just curious like you and searched.
- phildawes 8y ago
  https://tradingeconomics.com/united-states/wages https://tradingeconomics.com/united-states/wages https://tradingeconomics.com/united-states/employment-rate https://tradingeconomics.com/united-states/employment-rate https://tradingeconomics.com/spx:ind https://tradingeconomics.com/spx:ind
zozbot123 8y ago
It's not clear what you mean by "assets". Stock prices tend to reflect growth expectations, so higher prices today imply that real incomes are expected to increase. Other assets are almost the other way around - they increase in price when future interest rates are expected to be lower, which is associated with stagnation and lower growth. (The latter is why the argument in the article does not even wholly makes sense, IMHO. You don't raise rates in order to get some "room" to slash them in the future; you do it because if you don't, and market rates of return ("natural" rates) are trending higher due to improved growth, inflation will eventually spiral out of control. It's a bit like trying to balance a pencil on your hand, and keep it from falling.)
normal_man 8y ago
Even if wages are "going up" over the last year or whatever, they have been largely stagnant over the long term in the face of skyrocketing corporate profits. It's a problem 30 or more years in the making and it will come to a head. Look at the recent tax "reform;" we aren't any closer to fixing this, in fact we're accelerating the other way