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Inflation should raise interest rates which would then help savers and discourage borrowing due to higher interest costs. Furthermore, it would pressure housing
by cudgy 5y ago
Inflation should raise interest rates which would then help savers and discourage borrowing due to higher interest costs. Furthermore, it would pressure housing and asset prices lower making them more affordable while also pressuring wages higher. Seems better than the current climate.
- landemva 5y agoNo quite. Until the 'rona hit, the Fed was raising rates and stock market asset prices were also rising.
- cudgy 5y agoFed raising interest rates before corona was short-lived and symbolic at best. The stock market will not react until investors are convinced that the Fed has changed it’s multi-decade stance of extraordinarily low interest rates. This shift in market sentiment may not occur immediately after the Fed shifts, particularly since many of the younger investors know nothing else but low interest rates and expect them to continue indefinitely.