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> I have heard the case that the Fed can't raise rates... i think it's more political. A while back I was driving to pick up my son from a school thing and the

> I have heard the case that the Fed can't raise rates... i think it's more political. A while back I was driving to pick up my son from a school thing and there was an interview on NPR with the fed. I can't remember the exact date but a number of months ago. The fed was going on and on about how great the Build Back Better plan is and was going to be and now the inflation that was beginning to show was all due to supply chain issues and will be sorted out in a few months. I think the fed didn't want to raise rates and held out this long for political reasons only. Now, not raising rates presents more risk to the administration in power than raising rates and so here we are.

gsibble 5y ago
Indeed. The Fed is supposed to be politically neutral so for them to be supporting one party's major bill is a clear violation of that. And I fully believe they didn't raise rates earlier for political reasons.
- lotsofpulp 5y ago
  The Fed will never let asset prices fall in general, because it benefits all politicians and most voters to keep them rising. Voters want to see their 401k and IRAs going up, as long as their expenses go up slower.
  - gsibble 5y ago
    The thing is all of those assets are generally only owned by the top 5% (mostly top 1%) of the wealthy, so in reality, the Fed only serves the interests of the wealthy and everyone else gets screwed.
- AnimalMuppet 5y ago
  The Fed is supposed to be politically neutral, that is, not acting to help one party or the other. But that does not mean that the Fed has no opinion on the effects of big fiscal decisions. It is perfectly within the remit of the Fed for them to suggest that a large amount of Federal spending would currently be a good idea, and that it could usefully be applied to some end.
- chasd00 5y ago
  i can't update my original comment but it wasn't the fed i was listening to i believe it was the treasury secretary. so my mistake https://www.npr.org/2021/11/03/1051877079/treasury-secretary-janet-yellen-inflation-climate-cop26 https://www.npr.org/2021/11/03/1051877079/treasury-secretary...
Workaccount2 5y ago
THe fed has been holding back because it doesn't want to spook the markets. Tech has been Americas golden goose for the last decade and high interest rates are like kryptonite for tech. All those flashy startups burning hundreds of millions with only negative profits to show for it are a direct product of a low interest rate environment. The fed knows that raising rates will likely result in the goose losing most of its feathers, and the carry on effects from that.
- throwaway0a5e 5y ago
  That golden goose is enriching people who are using that wealth to do bad things to our country. If it were up to me the goose would get both barrels.
- rcpt 5y ago
  > Tech has been Americas golden goose for the last decade I wish the federal government realized this so that they'd fix Bay Area housing
everybodyknows 5y ago
> ... fed was going on and on about how great the Build Back Better plan ... Who exactly at the Federal Reserve was praising an Executive branch policy "on and on"? To do so would be an extraordinary lapse from the principle of central bank independence. Evidence is required.
- chasd00 5y ago
  You're right, it was the treasury secretary. I can't update my comment for some reason but see the link below https://www.npr.org/2021/11/03/1051877079/treasury-secretary-janet-yellen-inflation-climate-cop26 https://www.npr.org/2021/11/03/1051877079/treasury-secretary...

gsibble 5y ago

Indeed. The Fed is supposed to be politically neutral so for them to be supporting one party's major bill is a clear violation of that. And I fully believe they didn't raise rates earlier for political reasons.

lotsofpulp 5y ago
The Fed will never let asset prices fall in general, because it benefits all politicians and most voters to keep them rising. Voters want to see their 401k and IRAs going up, as long as their expenses go up slower.
- gsibble 5y ago
  The thing is all of those assets are generally only owned by the top 5% (mostly top 1%) of the wealthy, so in reality, the Fed only serves the interests of the wealthy and everyone else gets screwed.
AnimalMuppet 5y ago
The Fed is supposed to be politically neutral, that is, not acting to help one party or the other. But that does not mean that the Fed has no opinion on the effects of big fiscal decisions. It is perfectly within the remit of the Fed for them to suggest that a large amount of Federal spending would currently be a good idea, and that it could usefully be applied to some end.
chasd00 5y ago
i can't update my original comment but it wasn't the fed i was listening to i believe it was the treasury secretary. so my mistake https://www.npr.org/2021/11/03/1051877079/treasury-secretary-janet-yellen-inflation-climate-cop26 https://www.npr.org/2021/11/03/1051877079/treasury-secretary...

Workaccount2 5y ago

THe fed has been holding back because it doesn't want to spook the markets. Tech has been Americas golden goose for the last decade and high interest rates are like kryptonite for tech. All those flashy startups burning hundreds of millions with only negative profits to show for it are a direct product of a low interest rate environment. The fed knows that raising rates will likely result in the goose losing most of its feathers, and the carry on effects from that.

throwaway0a5e 5y ago
That golden goose is enriching people who are using that wealth to do bad things to our country. If it were up to me the goose would get both barrels.
rcpt 5y ago
> Tech has been Americas golden goose for the last decade I wish the federal government realized this so that they'd fix Bay Area housing

everybodyknows 5y ago

> ... fed was going on and on about how great the Build Back Better plan ... Who exactly at the Federal Reserve was praising an Executive branch policy "on and on"? To do so would be an extraordinary lapse from the principle of central bank independence. Evidence is required.

chasd00 5y ago
You're right, it was the treasury secretary. I can't update my comment for some reason but see the link below https://www.npr.org/2021/11/03/1051877079/treasury-secretary-janet-yellen-inflation-climate-cop26 https://www.npr.org/2021/11/03/1051877079/treasury-secretary...