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Fed raises rates by half a percentage point – the biggest hike in two decades

23 points by jbonniwell 4y ago

incomingpain 4y ago
When the fed starts raising, they always end up raising 6+ times. When on #2 they are raising it this much... hold onto your socks. >and current market pricing has the rate rising to 3%-3.25% by year’s end Are you holding on tight? >“In addition, COVID-related lockdowns in China are likely to exacerbate supply chain disruptions. The Committee is highly attentive to inflation risks,” the statement said. To debate supply vs demand side is pointless because the fed doesn't even know.
- simulate-me 4y ago
  3% is still super low historically. Let's wait and see how the economy actually reacts to the rising rates. Back in 2019, the Fed got cold feet and started lowering rates after hitting ~2.5%. The amount of money in the system is also unprecedented. Judging by the reverse repo rate, people are sitting on $2T with nothing to do with it. Maybe higher interest rates will bring that down, but inflation looks like it will remain high for some time.
  - incomingpain 4y ago
    >3% is still super low historically. Let's wait and see how the economy actually reacts to the rising rates. It just dropped 1.4% because of a 0.25% increase. Yikes. >Judging by the reverse repo rate, people are sitting on $2T with nothing to do with it. They are hedging their bets, not doing nothing with it. >but inflation looks like it will remain high for some time. About 1.5-2 years is my guess.
mrguyorama 4y ago
Maybe savings accounts and things like that will finally mean something again.
- rdtwo 4y ago
  Still -10% for the year idk I prefer -3% that we had before
Miner49er 4y ago
Stock market seems to like the news. S&P has shot up about 1.6%.
- simulate-me 4y ago
  The schedule of rate increases had already been announced. Given that a less aggressive schedule was unlikely given inflation, there was a possibility of a more aggressive schedule. I think the market is reacting to that.
- dragonwriter 4y ago
  The 50bp bump was telegraphed and the forward guidance seems to be consistent with what the Fed has been saying for a while, so I’d be skeptical (as, frankly, I usually am) of the usual simple causal narrative between the concrete event and the same day market movement.
deleted 4y ago
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23 points by jbonniwell 4y ago

When the fed starts raising, they always end up raising 6+ times. When on #2 they are raising it this much... hold onto your socks. >and current market pricing has the rate rising to 3%-3.25% by year’s end Are you holding on tight? >“In addition, COVID-related lockdowns in China are likely to exacerbate supply chain disruptions. The Committee is highly attentive to inflation risks,” the statement said. To debate supply vs demand side is pointless because the fed doesn't even know.

simulate-me 4y ago
3% is still super low historically. Let's wait and see how the economy actually reacts to the rising rates. Back in 2019, the Fed got cold feet and started lowering rates after hitting ~2.5%. The amount of money in the system is also unprecedented. Judging by the reverse repo rate, people are sitting on $2T with nothing to do with it. Maybe higher interest rates will bring that down, but inflation looks like it will remain high for some time.
- incomingpain 4y ago
  >3% is still super low historically. Let's wait and see how the economy actually reacts to the rising rates. It just dropped 1.4% because of a 0.25% increase. Yikes. >Judging by the reverse repo rate, people are sitting on $2T with nothing to do with it. They are hedging their bets, not doing nothing with it. >but inflation looks like it will remain high for some time. About 1.5-2 years is my guess.

mrguyorama 4y ago

Maybe savings accounts and things like that will finally mean something again.

rdtwo 4y ago
Still -10% for the year idk I prefer -3% that we had before

Miner49er 4y ago

Stock market seems to like the news. S&P has shot up about 1.6%.

simulate-me 4y ago
The schedule of rate increases had already been announced. Given that a less aggressive schedule was unlikely given inflation, there was a possibility of a more aggressive schedule. I think the market is reacting to that.
dragonwriter 4y ago
The 50bp bump was telegraphed and the forward guidance seems to be consistent with what the Fed has been saying for a while, so I’d be skeptical (as, frankly, I usually am) of the usual simple causal narrative between the concrete event and the same day market movement.

deleted 4y ago

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