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What is interesting to me is that many here cling to complication. Straight from the horses mouth in front of Congress, Powell minced no words on whether The Fe

by cco 3y ago

What is interesting to me is that many here cling to complication. Straight from the horses mouth in front of Congress, Powell minced no words on whether The Fed's interest rate hikes would tackle CPI inflation for consumers[1]. Powell made it clear that the interest rates may have an effect on durable goods (cars) and asset prices (stocks/real estate). Cars and real estate seem to be complicated, lots of other factors playing into prices right now. But clearly for many asset classes, especially startups, the haircut from higher interest rates has landed. But outside of that, the price of eggs, gas, coffee, basically no change (and none was suggested to ever occur!). [1] Video and transcript: https://www.warren.senate.gov/newsroom/press-releases/at-hearing-senator-warren-calls-out-chair-powell-for-feds-interest-rate-increases-that-wont-address-key-drivers-of-inflation-and-risk-driving-economy-into-recession https://www.warren.senate.gov/newsroom/press-releases/at-hea...

drawkbox 3y ago
> eggs, gas, coffee Largely because those are inelastic goods, they are always purchased. While some may be able pull back, most cannot. Higher interest rates for loans for larger purchases or business purchases/investments certainly are impacted by higher rates.
- cco 3y ago
  Right...but the talk of this thread, and the article, is whether the Fed interest rate can be relevant to "consumer felt" inflation. Nobody over the last couple of years has been complaining that the cost per share of Twilio is too high, people have been complaining about their grocery bills, their heating bills etc. The answer, directly from the Fed is, "No, our interest rate hikes will not change the price of gas at the pump or the cost of eggs." As I mentioned, things like houses are complicated, clearly there has been a _bit_ of downward pressure, but there are a ton of supply side complications preventing a big change (building has slowed, people with low interest rates are holding etc).

by cco 3y ago

drawkbox 3y ago

> eggs, gas, coffee Largely because those are inelastic goods, they are always purchased. While some may be able pull back, most cannot. Higher interest rates for loans for larger purchases or business purchases/investments certainly are impacted by higher rates.

cco 3y ago
Right...but the talk of this thread, and the article, is whether the Fed interest rate can be relevant to "consumer felt" inflation. Nobody over the last couple of years has been complaining that the cost per share of Twilio is too high, people have been complaining about their grocery bills, their heating bills etc. The answer, directly from the Fed is, "No, our interest rate hikes will not change the price of gas at the pump or the cost of eggs." As I mentioned, things like houses are complicated, clearly there has been a _bit_ of downward pressure, but there are a ton of supply side complications preventing a big change (building has slowed, people with low interest rates are holding etc).