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Maybe I'm delusional, but I think the Fed is raising rates just so they can lower them again. Look at what happened to rates between 16-19. They slowly raised
by mywittyname 4y ago
Maybe I'm delusional, but I think the Fed is raising rates just so they can lower them again.
Look at what happened to rates between 16-19. They slowly raised rates in little baby steps, but the moment the 2019 economy started to weeble-wobble, they cut rates almost in half. And when the economy fell over in 2020, they cut rates back down immediately.
It took them 3 years to raise rates from 0.13% to 1.70%, but less than a month to go from 1.60% to 0.05%
https://www.macrotrends.net/2015/fed-funds-rate-historical-chart https://www.macrotrends.net/2015/fed-funds-rate-historical-c...
- wuliwong 4y agoI saw this a couple weeks ago too. This could be the first time in around 40 years that they are able to raise interest rates higher than the previous peak before having to cut them.
- dragonwriter 4y ago> Look at what happened to rates between 16-19. They slowly raised rates in little baby steps, but the moment the 2019 economy started to weeble-wobble, they cut rates almost in half. Yes, raising rates to control inflation during an expansion and then cutting them when the economy weakens is... pretty exactly the usual simplified distillation of “things are behaving as normal” monetary policy. As is greater caution in raising rates (which fights inflation but slows the economy, with the downside risk of triggering/magnifying recession) vs. cutting rates (which stimulates expansion but risks inflation.) Not sure why you are pretending this totally conventional wisdom description is some kind of contrarian hot take.