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Yeah, we should pull a Turkey and cut rates instead! It's very clear from history that managing the economy with short sighted principles ends in poor outcomes
by adam_arthur 4y ago
Yeah, we should pull a Turkey and cut rates instead!
It's very clear from history that managing the economy with short sighted principles ends in poor outcomes. Too bad the Fed didn't consider this when they were doing QE and ZIRP for years too long. Now we pay the price of that short sighted failure
- r00fus 4y agoAbsolutely agree. The challenge is that increasing rates did nothing for e.g. home affordability. In fact, by increasing rates they caused builders to abandon some projects because they couldn't get funding. To do that, it would require congress to actually legislate or the exec branch to issue some executive orders that addressed market conditions like price gouging other than the big interest rates switch. ZIRP was a horrible policy and I'm glad it's not being continued.
- adam_arthur 4y agoHome prices are in decline, and new home construction (SFH + MFH) is at an all time high (though dipped a bit recently). Rents are actually in deflation mode the past few months. If rates stay high, home prices will fall, absolutely. Unemployment will rise too. Agreed that congress can do more to help though. Incentives are poorly structured to promote housing affordability.
- riku_iki 4y ago> new home construction (SFH + MFH) is at an all time high it doesn't look like that: https://fred.stlouisfed.org/series/HOUST https://fred.stlouisfed.org/series/HOUST