Why the fuck does this bitch want to wreck the economy?? Why the fuck would you raise interests rates NOW?!
economy is booming right now, it needs tapered down a bit
>>983162
Maybe if you compare it to 2008?
Borrowed money is cheap and easy to get. Too easy. That means too many dollars in the economy, chasing after the same goods and services. That drives up the prices of the goods and services. That's called inflation, which, if not closely managed, will assuredly drive the economy into a recession.
Rate hikes are the medicine that staves off the disease of inflation and recession. It might not taste so good, but its far better than the alternative.
Now you know.
>>983181
?
Does .2% yoy inflation warrant that analysis?
Inflation doesn't cause recessions unless it's 4-5% yoy. No one expects that will ever happen again.
We're just afraid of deflation.
Yellen should wait till March, but now all their credibility rests on this hike so they'll do it.
I don't expect another hike till September. 7 years of 0% come to an end.
>>983181
Cheap money and a lack of decent alternatives to invest in has driven bubbles in all sorts of assets. Higher rates are an attempt to rein some of those in, rather than have them burst again.
>>983145
we are at the end of a bull run and the market is flooded with capital and spending, it is time to change gear so to speak
>>983261
Higher rates burst bubbles...
Unless suddenly our fed has learned from the last 80 years...
>>983271
>0.5%
>high
>>983292
.375% is higher than .125%
It's one step closer to popping the bubble.
>>983261
The Fed doesn't intervene in the markets. Take off the tin foil.
>>983312
Hmmmmmmmmmmmmm
What do you think commodities are priced in?
What do you think the feds rate does?
>>983313
indirect versus direct
words are important
>>983162
What suggests the economy is booming? GDP growth is historically low, inflation too. Unemployment might be low but the labor force participation rate is, too.
>>983181
Inflation is currently low.
>>983312
I'm not sure you understand how the Fed works. Of course they intervene in the markets--it's part of their job.
>>983327
Indirect or direct the effect is obvious, correlated, and well known.
Why else do you think everyone is watching the fed like hawks?
>>983328
>Inflation is currently low
Duh. And it needs to stay that way. Ever heard of preventive medicine? Preventing the disease is always better than curing it.
>Of course they intervene in the markets--it's part of their job.
Nope. They watch the markets, they forecast the markets, they model the markets, they promote the stability of the markets, they warn about the markets ... but they don't directly intervene in the markets. Even in the broadest exercise of its powers, the most the Fed has ever done is make an emergency loan to a major market player.
The only "market" the Fed actually operates in is the money market.
>>983340
Stop being simplistic. We're talking about advanced market and monetary theory here. The shit you're repeating comes straight from MartketWatch headlines. Herp derp Fed all powerful. Shut up.
>>983145
Because banks throw a shitfit on the market every time they might be raised, and it's unsustainable how low they are right now so we might as well just raise them regardless of whether or not people are throwing financial temper tantrums.
>>983345
>Duh. And it needs to stay that way. Ever heard of preventive medicine? Preventing the disease is always better than curing it.
Many economists agree that 3-4% inflation would not be an unhealthy rate because it would drive down real wages and act as a wealth transfer to debtors. Basically higher inflation would ignite the economy.
>Nope. They watch the markets, they forecast the markets, they model the markets, they promote the stability of the markets, they warn about the markets ... but they don't directly intervene in the markets.
Wrong. The Fed purchases Treasury securities as well as asset-backed securities, especially mortgage-backed securities. These purchases are made in the private market, ie the Fed directly intervenes in the market.
>>983345
Are you implying money markets aren't the backbone to equities? If so, you should go back to school and learn about how firms raise capital in money markets to fund operations which raise or lower the pricing of their equity offerings, either directly or indirectly. Faggot.
>>983366
>The Fed purchases Treasury securities as well as asset-backed securities, especially mortgage-backed securities.
Duh. Read next time.
>The only "market" the Fed actually operates in is the money market.
>Many economists agree that 3-4% inflation would not be an unhealthy rate
An interesting theory, but even without investigation I can tell it's horse shit.
1. Drive down real wages? That's the LAST thing the U.S. economy needs. Have you seen a chart of domestic wages lately?
2. Wealth transfer to debtors? You do know that debts are denominated in nominal dollars, not real. If you owe $100 to the bank, the fact that inflation makes your hundred dollars worth less doesn't change the fact that you owe exactly $100 to the bank. Indeed, it just makes it harder for you to come up with the $100 to pay off your debt.
You're citing some seriously dubious-sounding bullshit here. If you have some reputable sources to cite, I'd be glad to read them. But until then, you sound like a wack job.
>>983345
Inflation being low is directly related to a stagnant economy. Name any major economy that has grown more than 2.5% for 5 years with low inflation. Economies inflate when they are growing fast.
We have the problem of Japan's secular stagnation on our hands.
The Fed intervenes in wayyyyyyy more than the money market since 2008.
Nowadays they have a "direct" effect on treasury rates, inflation, commodities, and assets.
>>983397
Treasury securities and derivative securities (any sort of ABS) are not money market investment instruments. I don't know what you think you've learned from watching Wolf of Wall Street and coming onto this board but you're wasting your time.
>>983400
>Are you implying money markets aren't the backbone to equities?
I'm stating (not implying) that they're not the same markets. Which is a fact.
Don't read into my posts just so you can knock down a strawman.
Faggot.
>>983401
>Indeed, it just makes it harder for you to come up with the $100 to pay off your debt.
I think we can now all agree you're wrong.
>>983401
>Duh. Read next time.
Asset-backed securities are NOT money market securities you mongoloid.
>You're citing some seriously dubious-sounding bullshit here. If you have some reputable sources to cite, I'd be glad to read them. But until then, you sound like a wack job.
You don't understand a thing about economic theory, do you?
>>983407
The money market and the equity market are completely interconnected.
The Fed intervenes directly in the money market, and because of how interconnected the two markets are it essentially intervenes directly into the equity market.
The Fed looks at everyone's money fleeing to safe assets, so they intervene in the money market to force people into risky assets in search of returns. These risky assets are the equity market, which explains the 250% return in stocks.
>>983404
>Inflation being low is directly related to a stagnant economy. Name any major economy that has grown more than 2.5% for 5 years with low inflation. Economies inflate when they are growing fast.
Are you trying to equate GDP and inflation? 'Cause it sounds like you're trying to equate GDP and inflation. And that makes you sound r-e-e-e-e-e-ally stupid.
>>983411
Great logic, sport. Reddit tier.
>>983412
>Asset-backed securities are NOT money market securities
Securitized debt is a monetary instrument. They convert future cash flows into current liquidity. I.e., they're monetary tools in the hands of the Fed. Nothing more;nothing less.
I know. I helped invent them.
>You don't understand a thing about economic theory, do you?
Great logic, sport. Reddit tier.
>>983401
>2. Wealth transfer to debtors? You do know that debts are denominated in nominal dollars, not real. If you owe $100 to the bank, the fact that inflation makes your hundred dollars worth less doesn't change the fact that you owe exactly $100 to the bank. Indeed, it just makes it harder for you to come up with the $100 to pay off your debt.
I'd encourage you to leave /biz/ and read up about how inflation effects the economy. This is literally ECON 101 material. Once you've learned some basic economics then you might be able to contribute worthwhile posts.
>>983415
>Securitized debt is a monetary instrument. They convert future cash flows into current liquidity. I.e., they're monetary tools in the hands of the Fed. Nothing more;nothing less. I know. I helped invent them.
"I helped invent something I don't truly understand." LOL, okay bud. And my dad is the head of Nintendo.
>>983415
>you're trying to equate
The inflation rate and GDP growth are directly correlated. Do you not know this? Inflation happens because people think their money will buy less in the future so they spend more. This leads to more investment and consumption in turn. Why else is the Fed chasing after 2% inflation?
>great logic
Inflation makes it easier for debtors to pay off their debt.
The fact their $100 is buying less doesn't mean their employer suddenly is paying them less because inflation is higher.
You don't understand this and that makes you a fool not worth responding to anymore.
>>983414
1. Calm down spaz. Let me reply before splurging more nonsense. It makes the conversation flow more naturally.
2. Interconnected =//= same. Strawman elsewhere, kid.
And if you think the Fed tries to command the direction of the equity markets, you're insanely delusional. The equity markets have their own internal compass. At most, the Fed clears the glidepath.
>>983422
Try explaining WHY you think I'm wrong. It'll help you understand why I'm right. This is how you learn, and this is why I'm taking the time to teach you.
>>983426
>Try explaining WHY you think I'm wrong. It'll help you understand why I'm right.
There's no point in arguing with you because you're wrong but are either (1) trolling or (2) too stubborn to admit it. Here are some facts:
>you argued that ABS are money market securities. They are not.
>you argued that unexpected inflation is not a wealth transfer from creditors to debtors. It is.
>you argued that the Fed only intervenes in the money market. This is false.
tl;dr you're full of shit
>>983426
M8....you're wrong. It's backwards.
You lent me $100 dollars in year one. I earn $100 dollars a year for my job.
Inflation is 50%. So my wages are adjusted for inflation at the end of the year. I now earn 150 dollars. I pay you off and have 50 dollars left over. If inflation was 0, I would have nothing left over at the end of the year.
Inflation helps borrowers.
>>983431
>you argued that ABS are money market securities. They are not.
No, I said they're liquidity instruments. Which, in the hands of the Fed, are monetary tools.
>you argued that unexpected inflation is not a wealth transfer from creditors to debtors. It is.
No, it is not. ANDI explained why. While you have yet to give a cogent response or provide any support for your assertion.
>you argued that the Fed only intervenes in the money market. This is false.
No, this is not false And so far, no one has cited a single example of Fed action that wasn't direct participation in the money markets. Therefore, the burden of production remains in your court.
>tl;dr you're full of shit
This is 4chan code for "I don't have a good reply but my ego an immaturity prevents me from admitting that I was wrong."
Its ok anon, really . You're here to learn, and I'm here to teach. You don't have to admit anything, as long as you gain some wisdom from the lesson.
>>983437
>So my wages are adjusted for inflation at the end of the year.
>implying
Wages aren't lockstep with inflation. This isn't a school book example. We live in the real world.
>>983181
Rates are 4000 year low, we have zero inflation. I think you've learnt your lessons from some kind of magic books of economics
>>983441
>Wages aren't lockstep with inflation. This isn't a school book example. We live in the real world.
They pretty much are, if they weren't, real median wages would have decreased since 1970 which they objectively have not.
Every company I've worked for has adjusted my wages for inflation at the end of the year, if they didn't, employees would leave.
>>983446
I don't disagree that there's a relationship between real wages and inflation (especially over long testing periods) but to state that they move "pretty much" in lockstep is ignorant.
>Every company I've worked for
Anecdotal evidence isn't scientific.
>>983145
>Why the fuck does this bitch want to wreck the economy?? Why the fuck would you raise interests rates NOW?!
Because the money train will slip off the tracks if it goes too fast, after all it's made of paper not iron and if/when it does go off the tracks you're all worth nothing but gunpowder.
It's not even like they're hitting the brakes by raising rates, it's that they're coasting instead of stoking.
But you fucking burnouts don't even care about long-term adverse effects do you?
>>983441
>my ego an immaturity
>ego an immaturity
>an immaturity
Something crucial here is missing yet you act as if you still have any credibility here?
>>984165
Are you really the fag who splurgs out on 4chan because someone mistyped the word "and"? Are you actually that brain damaged? Are you really that guy?
I'm embarrassed for you, and that's saying a lot in this thread.
>>983404
>Inflation being low is directly related to a stagnant economy.
No, it indicates a consolidating economy, something necessary to sustain boom cycles without incurring extended periods of stagnation.
A truly stagnant economy in a Keynesian system would have growth equal to inflation - the eventual result to which would be losing international market share, getting priced out of international trade and then suffering a collapse in currency value which for some reason doesn't count as inflation.
The inflation targets are more of an upper limit - if it's reached (in the USA in the midst of the current status-quo) the alarms get sounded and equity abandons ship towards less artificial economies until the cronies fuck themselves and come crawling back begging for the return of equity.
>>983412
>Asset-backed securities are NOT money market securities you mongoloid.
Not true, the shares for my vintage 1992 authentic US mint penny are well worth their multi-million dollar market cap.
>>983311
When rates are under 2% they don't determine the timing of when the bubble pops, this is because the difference between 1% rates and 2% is insignificant even though it's a 100% difference. Raising rates could actually extend a bubble because of the big bank takes little bank effect.
>>983271
Yeah, but higher rates historically are well over 5% and the money is still as hard as ever, the lack of inflation in the midst all the liberal handouts is proof of that.
>>984170
:) how deep in the archives did you dig for that one? <3 :D
Stupid aussie fag. Next time be awake during normal hours and participate in the discussion in real time, instead of posting dozens of rambling serial responses to 12 hour old posts.
Fucking pathetic.
>>984211
If you dweebs weren't performing Zionism all over the internet and filtering everything so heavily then maybe perusing interactions would be worth something instead of being worthless like most of you are.
>>984213
Fuck a kangaroo, mate.
>>983145
Semi related question:
What goods/services are included in the calculation to figure out inflation?
Does it include:
>education
>healthcare/insurance
>property rates and such
>other miscellany
?
>>983145
Yea I agree. Why the fuck would she raise rates now?.. She should have done that in 2012!! The stock market is going to drop 2,000 points now what a fucking idiot.
>>983218
Why would I be worried about deflation? I don't own a house so I don't give a fuck. Bring on the lower prices
>>984740
and 50% unemployment
>>984681
>The stock market is going to drop 2,000 points now what a fucking idiot.
>Fed gives rate hike guidance 6 months ago
>Fed warns of rate hike 30 days ago
>Fed declares rate hike two weeks in advance
>4chan thinks market will react on the day that rates increase
I've lost all hope for this cesspool.
>>984815
This
The market has already priced in the rate hike you neet retards.
We are undergoing an economic crisis that the Fed is now powerless to stop.
Interest rates this low for this long arguably damage the economy as now markets are reliant on rock bottom interest rates being the new normal. At the same time, inflation is way below target rates, hell in some months we suffer deflation which is unheard of in modern economics.
The Fed is simply unable to raise or lower rates to improve economic conditions. Trillions of dollars in QE were needed just to keep things stable. This is VERY BAD. What we are doing is not working. The Fed has done all they could and pulled out all the stops.
All of this boils down to the fact that the political process is completely deadlocked. The private sector is failing at providing decent investment, while any sort of new public spending is completely off limits. We need a serious public infrastructure plan more than ever.
>>984834
I thought Im supposed to buy the newspapers news
>>984815
nah they jumped the gun a bit a few days ago. Bonds and equities going up.
>>983162
>economy is booming right now
Nigga please look at how many americans are on foodstamps are actual rate of unemployment when you count those whove stopped looking for a job the derivatives expoaure and the size of our banks the amoint of people on some form of welfare the amount of private debt held by the average american and tell me that the economy is booming. You so realize that if interest rates were set to say 5% which isnt unreasonable at all the us government would be using every tax dollar it collects in a year just to pay off our national debts interest not to mention the effect that raising interest rates would have on the banks.
>>983145
Who the hell likes having pretty much no return for low-risk savings? No one is all in on the stock market and there is no incentive to save with these 0 rates.
>>983162
>BOOMING
kill yourself my man
Jobs are up because of temporary Christmas jobs. Please raise the rates. My gold and silver will go as high as Janet Yellen.
>>983145
Because wielding interest rates like the sword of damocles only works if you have somewhere to move them to. Do you think negative interest rates would be better than zero? do you think they'd be better than the pitiful .25% raise they're going to get at the end of the year? Get fucking real man. The stocks market is hiding some very real problems with the economy that are obvious as hell. The neo keynsians harvard phd retards in charge of the fed know this, they just don't want to believe it.
>>984834
Whatcha mean "priced in"?
>>983446
>if they weren't, real median wages would have decreased since 1970 which they objectively have not.
Except they have. You sound like a more educated version of the memstockers on robinhood.
>My friends all eat at Dairy Queen so Dairy Queen must be doing well.
>>983145
>tapered down a bit
Can't taper a ponzi scheme
>>983162
#NoMoreZombieBanks
#Liquidity
#MaxKeiserWasRight
