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I definitely blame the Fed. It's pretty hard to be in charge of a public company and say no to the shareholders who want you to take advantage of the sudden bu

I definitely blame the Fed. It's pretty hard to be in charge of a public company and say no to the shareholders who want you to take advantage of the sudden bubble in demand. Companies would have been punished for not growing, and now they are being punished if they don't shrink. Who created that perverse system of incentives? The Fed, by making a number of mistakes in the past decade that kept the economy overboosted, by boosting it even more during 2020, and then by taking drastic action to kill the monster they created.

kypro 4y ago
Where this logic irritates me the most is in the housing market. Similarly to those who blame companies for over hiring to meet pandemic demand, I've seen some people suggest the average home buyer was being reckless for buying a home during the pandemic, because "they brought the bubble!" I guess it's strange to me how the Fed can pump every asset class to the moon, force companies to over hire to meet demand, and cause a huge inflationary problem for consumers – all while promising not to raise interest rates – then rug pull everyone but get no blame for any of it. Instead I find I'm invited to blame the average business or home owner for being "reckless" for hiring to meet demand for buying a home for their family, while praising the Fed for "doing what's necessary"? Give me a break.
- juve1996 4y ago
  > I guess it's strange to me how the Fed can pump every asset class to the moon, force companies to over hire to meet demand, and cause a huge inflationary problem for consumers There were no consumer inflation issues for the past decade. It took a once in a life time pandemic supply shock to cause those issues. You're being unfair. It's easy to blame the fed for all your problems. The fact is inflation was stable and the economy was just fine prior to the COVID19 pandemic. I don't think any amount of rate raises prior to 2020 would have had any appreciable impact on what we're facing now. Most of these layoffs are happening in the tech sector. Others are healthy. This isn't an economy wide problem yet. It's hard to not blame the individual companies for poor management. > Instead I find I'm invited to blame the average business or home owner for being "reckless" for hiring to meet demand for buying a home for their family, while praising the Fed for "doing what's necessary"? Give me a break. The fact is if you want what you want and want it now, and everyone else does, you have to pay. It's easy to say "oh they should've raised rates in 2017 or 2014" in 2022. It was much harder to say back then.
  - paulmd 4y ago
    > It's easy to say "oh they should've raised rates in 2017 or 2014" in 2022. It was much harder to say back then. it's funny that you brought this up unprompted because this is the obvious counterargument - the fed really really should have been doing moderate tightening of the interest rate in 2017-2018-2019 and everybody knows it, even you. Everyone said it too, I completely do not get your "it was much harder to say it back then", this was specifically something that everyone said was a bad idea except for one individual (let's call him Individual Number One) who wanted to goose the economy to get numbers up for his re-election the following year, and instead leaned on the fed to cut interest rates instead, throwing gas onto an already-roaring fire. And then when the pandemic hit the fed had absolutely no room to maneuver. https://www.washingtonpost.com/business/2019/10/30/federal-reserve-cuts-interest-rate-third-time-this-year-effort-boost-us-economy/ https://www.washingtonpost.com/business/2019/10/30/federal-r... this was all extremely predictable, for literally everyone except Individual #1, who didn't really care.
    - juve1996 4y ago
      There were plenty of times to raise rates even before the Trump administration. But there were no major negative impacts until the COVID19 pandemic. The point is it's easy for us to say this now. Had the pandemic not occurred we'd maybe still be in the position we were in 2019. You can argue for resiliency but you can't time the market. You could argue rates should've been raised in 12, 13, 14, 15, 16, 17, 18, 19. If you optimize too much for resiliency, then you overcorrect and cause recessions, which no one wants. And there'd be people just like you parroting how "i told you they shouldn't have raised rates!" Now let's look at the facts. Despite sharp rate increases, the economy still grew last quarter, inflation has is normalizing, and the job market outside of tech is still robust. Frankly, hard to think of a better outcome. The asset inflation prior to COVID19 was slightly problematic. But the inflation we face now has less to do with that and more to do with demographic shifts and larger societal changes that needed a spark to begin.
      - twblalock 4y ago
        Inflation "normalizing" is actually likely to be due to a change in the way it is measured: https://twitter.com/jasonfurman/status/1624093631929020416 https://twitter.com/jasonfurman/status/1624093631929020416

kypro 4y ago

Where this logic irritates me the most is in the housing market. Similarly to those who blame companies for over hiring to meet pandemic demand, I've seen some people suggest the average home buyer was being reckless for buying a home during the pandemic, because "they brought the bubble!" I guess it's strange to me how the Fed can pump every asset class to the moon, force companies to over hire to meet demand, and cause a huge inflationary problem for consumers – all while promising not to raise interest rates – then rug pull everyone but get no blame for any of it. Instead I find I'm invited to blame the average business or home owner for being "reckless" for hiring to meet demand for buying a home for their family, while praising the Fed for "doing what's necessary"? Give me a break.

juve1996 4y ago
> I guess it's strange to me how the Fed can pump every asset class to the moon, force companies to over hire to meet demand, and cause a huge inflationary problem for consumers There were no consumer inflation issues for the past decade. It took a once in a life time pandemic supply shock to cause those issues. You're being unfair. It's easy to blame the fed for all your problems. The fact is inflation was stable and the economy was just fine prior to the COVID19 pandemic. I don't think any amount of rate raises prior to 2020 would have had any appreciable impact on what we're facing now. Most of these layoffs are happening in the tech sector. Others are healthy. This isn't an economy wide problem yet. It's hard to not blame the individual companies for poor management. > Instead I find I'm invited to blame the average business or home owner for being "reckless" for hiring to meet demand for buying a home for their family, while praising the Fed for "doing what's necessary"? Give me a break. The fact is if you want what you want and want it now, and everyone else does, you have to pay. It's easy to say "oh they should've raised rates in 2017 or 2014" in 2022. It was much harder to say back then.
- paulmd 4y ago
  > It's easy to say "oh they should've raised rates in 2017 or 2014" in 2022. It was much harder to say back then. it's funny that you brought this up unprompted because this is the obvious counterargument - the fed really really should have been doing moderate tightening of the interest rate in 2017-2018-2019 and everybody knows it, even you. Everyone said it too, I completely do not get your "it was much harder to say it back then", this was specifically something that everyone said was a bad idea except for one individual (let's call him Individual Number One) who wanted to goose the economy to get numbers up for his re-election the following year, and instead leaned on the fed to cut interest rates instead, throwing gas onto an already-roaring fire. And then when the pandemic hit the fed had absolutely no room to maneuver. https://www.washingtonpost.com/business/2019/10/30/federal-reserve-cuts-interest-rate-third-time-this-year-effort-boost-us-economy/ https://www.washingtonpost.com/business/2019/10/30/federal-r... this was all extremely predictable, for literally everyone except Individual #1, who didn't really care.
  - juve1996 4y ago
    There were plenty of times to raise rates even before the Trump administration. But there were no major negative impacts until the COVID19 pandemic. The point is it's easy for us to say this now. Had the pandemic not occurred we'd maybe still be in the position we were in 2019. You can argue for resiliency but you can't time the market. You could argue rates should've been raised in 12, 13, 14, 15, 16, 17, 18, 19. If you optimize too much for resiliency, then you overcorrect and cause recessions, which no one wants. And there'd be people just like you parroting how "i told you they shouldn't have raised rates!" Now let's look at the facts. Despite sharp rate increases, the economy still grew last quarter, inflation has is normalizing, and the job market outside of tech is still robust. Frankly, hard to think of a better outcome. The asset inflation prior to COVID19 was slightly problematic. But the inflation we face now has less to do with that and more to do with demographic shifts and larger societal changes that needed a spark to begin.
    - twblalock 4y ago
      Inflation "normalizing" is actually likely to be due to a change in the way it is measured: https://twitter.com/jasonfurman/status/1624093631929020416 https://twitter.com/jasonfurman/status/1624093631929020416