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How can the fed both cause inflation and high housing costs? Raising interest rates like they have been doing should lower inflation but make housing more expen
by matthewbauer 3y ago
How can the fed both cause inflation and high housing costs? Raising interest rates like they have been doing should lower inflation but make housing more expensive.
- rvba 3y agoFirst they give free money so house prices skyrocket. 10 years later they "fight" inflation that they caused by making credit scarce. House prices are sticky and dont drop by 50%. Also in general the inflation created through interest is not returned by central banks, so they make rich richer and poor poorer.
- ianai 3y agohttps://fred.stlouisfed.org/series/CSUSHPINSA https://fred.stlouisfed.org/series/CSUSHPINSA
- robertlagrant 3y agoRaising inflation only lowers house prices if the number of people competing for the houses remains static.