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> the Federal reserve also has no leverage to modify the prime interest rate to combat this inflation, as it already sits near-zero ...huh? If you want to lowe

> the Federal reserve also has no leverage to modify the prime interest rate to combat this inflation, as it already sits near-zero ...huh? If you want to lower inflation you'd typically raise interest rates... (These sorts of stupid-simple mistakes are pretty typical from inflation fearmongers in threads like this one... a lot of words that make it sounds like they know what they're talking about but sprinkled with incredible tells like this one.)

kesselvon 5y ago
You can tell they're fresh because there was a big fear of inflation because of quantitative easing. Thinking of QE as a solution to inflation is really something else.
anm89 5y ago
Right but with massive debts and a fairly weak economy that is show signs of continuing to slow, this is exactly why the Fed is between a rock and a hard place. The smart mmoney is on rates staying low for a long time which shows you just how powerless the Fed is right now. They would LOVE to raise rates. They can't.
- littlestymaar 5y ago
  They will raise it as soon as inflation goes up, even if it cause the entire economy to struggle. Volker did exactly that in the early 80s.
  - anm89 5y ago
    > They will raise it as soon as inflation goes up Yoy 6% for october. Inflation is already up. What are they waiting for? 10%? 15%? Also Powell isn't Volker by a long shot. I don't recall the Volker pivot because a few traders weren't having a good day.
    - littlestymaar 5y ago
      > Yoy 6% for october. Inflation is already up. What are they waiting for? 10%? 15%? You realize that this figure was only calculated a few days ago, right? What reaction time do you expect?
      - anm89 5y ago
        So then you want to go on the record and say you think they will raise rates at the next on FOMC meeting?
        littlestymaar 5y ago
        Yes,I have little doubt that the rate won't remain as low as they are now for much longer. I don't know if that will be at the next meeting or in Q1 2022 though.
- dlp211 5y ago
  > Right but with massive debts and a fairly weak economy that is show signs of continuing to slow, this is exactly why the Fed is between a rock and a hard place. lol? whut? Stop talking about government debt, it's a stupid talking point used to beat people over the head with who want to govern by misleading voters into believing that government debt is the same as household debt. Also, what weak economy? Economic growth is up, wages are up, unemployment is down, personal debt is down. The only thing that is currently "weak" in the US economy is our JIT supply lines, and that will work itself out eventually.
  - anm89 5y ago
    Saying lol doesn't invalidate basic economics > Stop talking about government debt, it's a stupid talking point Said not a single respectable person in economics or finance ever.
    - kesselvon 5y ago
      Debt isn't going to impact inflation in the near or medium term, so long as people keep buying Treasuries. There's no real alternative to stuffing money into Treasuries, so it's kind of a moot point right now.
  - long_time_gone 5y ago
    > Also, what weak economy? Economic growth is up, wages are up, unemployment is down, personal debt is down. The only thing that is currently "weak" in the US economy is our JIT supply lines, and that will work itself out eventually. Agree with this take. The GDPNow estimate for Q4 growth is 8.5%. A lot of this seems to be getting lost in the politically obsessed back-and-forth. https://www.atlantafed.org/cqer/research/gdpnow https://www.atlantafed.org/cqer/research/gdpnow
  - ignasheahy 5y ago
    >Also, what weak economy? Economic growth is up, wages are up, unemployment is down, personal debt is down. That usually happens in the beginning stages of high inflation scenario. Also government debt is not the same as household debt, however it still matters especially at these high levels. There is a breaking point just no one knows where it is. 300% gdp? 500%? 700%. At some point it will break down.
ForHackernews 5y ago
> you need to take this seriously > in a low-gravity environment, everything becomes much heavier to lift > brb hold my cryptobags

kesselvon 5y ago

You can tell they're fresh because there was a big fear of inflation because of quantitative easing. Thinking of QE as a solution to inflation is really something else.

anm89 5y ago

Right but with massive debts and a fairly weak economy that is show signs of continuing to slow, this is exactly why the Fed is between a rock and a hard place. The smart mmoney is on rates staying low for a long time which shows you just how powerless the Fed is right now. They would LOVE to raise rates. They can't.

littlestymaar 5y ago
They will raise it as soon as inflation goes up, even if it cause the entire economy to struggle. Volker did exactly that in the early 80s.
- anm89 5y ago
  > They will raise it as soon as inflation goes up Yoy 6% for october. Inflation is already up. What are they waiting for? 10%? 15%? Also Powell isn't Volker by a long shot. I don't recall the Volker pivot because a few traders weren't having a good day.
  - littlestymaar 5y ago
    > Yoy 6% for october. Inflation is already up. What are they waiting for? 10%? 15%? You realize that this figure was only calculated a few days ago, right? What reaction time do you expect?
    - anm89 5y ago
      So then you want to go on the record and say you think they will raise rates at the next on FOMC meeting?
      - littlestymaar 5y ago
        Yes,I have little doubt that the rate won't remain as low as they are now for much longer. I don't know if that will be at the next meeting or in Q1 2022 though.
dlp211 5y ago
> Right but with massive debts and a fairly weak economy that is show signs of continuing to slow, this is exactly why the Fed is between a rock and a hard place. lol? whut? Stop talking about government debt, it's a stupid talking point used to beat people over the head with who want to govern by misleading voters into believing that government debt is the same as household debt. Also, what weak economy? Economic growth is up, wages are up, unemployment is down, personal debt is down. The only thing that is currently "weak" in the US economy is our JIT supply lines, and that will work itself out eventually.
- anm89 5y ago
  Saying lol doesn't invalidate basic economics > Stop talking about government debt, it's a stupid talking point Said not a single respectable person in economics or finance ever.
  - kesselvon 5y ago
    Debt isn't going to impact inflation in the near or medium term, so long as people keep buying Treasuries. There's no real alternative to stuffing money into Treasuries, so it's kind of a moot point right now.
- long_time_gone 5y ago
  > Also, what weak economy? Economic growth is up, wages are up, unemployment is down, personal debt is down. The only thing that is currently "weak" in the US economy is our JIT supply lines, and that will work itself out eventually. Agree with this take. The GDPNow estimate for Q4 growth is 8.5%. A lot of this seems to be getting lost in the politically obsessed back-and-forth. https://www.atlantafed.org/cqer/research/gdpnow https://www.atlantafed.org/cqer/research/gdpnow
- ignasheahy 5y ago
  >Also, what weak economy? Economic growth is up, wages are up, unemployment is down, personal debt is down. That usually happens in the beginning stages of high inflation scenario. Also government debt is not the same as household debt, however it still matters especially at these high levels. There is a breaking point just no one knows where it is. 300% gdp? 500%? 700%. At some point it will break down.

ForHackernews 5y ago

> you need to take this seriously > in a low-gravity environment, everything becomes much heavier to lift > brb hold my cryptobags