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Exactly, the best time to raise rates was 6 years ago when the economy was humming along well. Instead the fed kept them too low creating huge bubbles, which it
by rurp 4y ago
Exactly, the best time to raise rates was 6 years ago when the economy was humming along well. Instead the fed kept them too low creating huge bubbles, which it's now in the process of popping. These next few years are going to be a lot rougher than they needed to be.
This isn't just hindsight bias either. Plenty of people have been warning about exactly this problem for years.
- kgwgk 4y agoThey DID raise rates 6 years ago: from 0% in 2015 to 2.45% in 2019. It should have been done much earlier. And there was no need to push equity markets 50% up from pre-pandemic levels. That was the time for a soft-landing.
- hgomersall 4y agoWhy should they have raised interest rates? Standard economic dogma has it that below target inflation like the last 15 years needed low interest rates to get it back up. Or could it be that standard economic dogma is a steaming pile of horse shit?
- rurp 4y agoSure inflation was low for buying food or milk or whatever, but was much higher than 2% in some massive areas of the economy, like stocks and housing. Keeping rates so low created huge pressure to invest in high risk speculative assets. Crypto is basically the poster child for how absurd things have been in recent years.