Proof of a bad economy? 2,417 Days and Counting...

[Freewill]

The fed has held the interest rate a zero for a record 2417 days. This indicates to me a dead economy, flat lined. Consumer spending is up because energy prices, oil, is down. This is all good for people who want to invest and have money to spend. Not so good for the country.

2 417 Days and Counting... The Weekly Standard

Hurry up and wait. Hurry to the announcement by the Federal Reserve Board’s monetary policy committee, and then wait for the next one. After 2,417 days of keeping its key interest rate at zero, on Wednesday of last week the Fed policy team decided that a few more weeks or months at that level might be a good idea. The Fed knows that zero is not a sustainable level for interest rates, but also wants to be certain it doesn’t abort the none-too-robust recovery. My guess is that Fed chairwoman Janet Yellen knows she has to move soon, but figured that doing so right before key data releases in the next few days and next week just wasn’t worth the risk of announcing an increase and then wishing she hadn’t. She was quickly proved right.

 

[Moonglow]

so inflation is necessary for?

 

[Obiwan]

so inflation is necessary for?

To cover that $15.00/HR you want for flipping burgers....

 

[Derideo_Te]

Raising interest rates means inflation which effectively reduces the disposable income of consumers and thereby the economy goes into another recession.

Is that what the OP wants?

The economy to go into the toilet before the 2016 election so that the GOP stands a better chance?

 

[Moonglow]

so inflation is necessary for?

To cover that $15.00/HR you want for flipping burgers....

How does inflation cover flipping an expensive piece of beef?

 

[Moonglow]

Raising interest rates means inflation which effectively reduces the disposable income of consumers and thereby the economy goes into another recession.

Is that what the OP wants?

The economy to go into the toilet before the 2016 election so that the GOP stands a better chance?

He must have missed out on the fun days of the later 1970's and early 1980's...

 

[Freewill]

OMG people are equating the feds raising interest rates to inflation, man is that stupid.

Inflating the money supply causes inflation. (thus the name and is what the fed is also doing)

Raising the interest rate is an indication of an improving economy.

Down side is mortgage rates will also increase, buy now.

Plus side the companies hording money may use that money instead of borrowing money.

Never the less, keeping the interest rate at zero is an indication of a very sluggish economy. The election doesn't matter, inflation does not enter into the discussion, and I would like to have investment opportunities where I can get a decent rate of return, one that keeps up with inflation. You know like most small investors.

 

[Derideo_Te]

OMG people are equating the feds raising interest rates to inflation, man is that stupid.

Inflating the money supply causes inflation. (thus the name and is what the fed is also doing)

Raising the interest rate is an indication of an improving economy.

Down side is mortgage rates will also increase, buy now.

Plus side the companies hording money may use that money instead of borrowing money.

Never the less, keeping the interest rate at zero is an indication of a very sluggish economy. The election doesn't matter, inflation does not enter into the discussion, and I would like to have investment opportunities where I can get a decent rate of return, one that keeps up with inflation. You know like most small investors.

Inflation protected treasury bonds do exactly that.

And yes, this is about politics because you posted this thread under politics.

The money supply was "inflated" with the "quantitative easing" but it didn't cause inflation.

Inflation occurs when there is too much disposable income in the hands of consumers.

Raising interest rates will squeeze consumers and stall out the economy which is running along relatively smoothly for a change. Probably because the Wall Street Casino bosses don't have another bubble scam going just yet. Give them time.

 

[Freewill]

OMG people are equating the feds raising interest rates to inflation, man is that stupid.

Inflating the money supply causes inflation. (thus the name and is what the fed is also doing)

Raising the interest rate is an indication of an improving economy.

Down side is mortgage rates will also increase, buy now.

Plus side the companies hording money may use that money instead of borrowing money.

Never the less, keeping the interest rate at zero is an indication of a very sluggish economy. The election doesn't matter, inflation does not enter into the discussion, and I would like to have investment opportunities where I can get a decent rate of return, one that keeps up with inflation. You know like most small investors.

Inflation protected treasury bonds do exactly that.

And yes, this is about politics because you posted this thread under politics.

The money supply was "inflated" with the "quantitative easing" but it didn't cause inflation.

Inflation occurs when there is too much disposable income in the hands of consumers.

Raising interest rates will squeeze consumers and stall out the economy which is running along relatively smoothly for a change. Probably because the Wall Street Casino bosses don't have another bubble scam going just yet. Give them time.

You need not believe me, I went and found you some reading.

What s so bad about higher interest rates - MarketWatch

In my view, the flap over higher interest rates is much ado about nothing.

For one thing, they provide much needed income for savers. And in case you didn’t notice, we are a nation of savers.

Seniors and others on fixed incomes also benefit when rates go up. These people will spend much of the incremental dollars which higher rates confer.

ty Images
The U.S. Federal Reserve building.
Rising interest rates also encourage the banks to lend. As rates go up, the spread between the cost of funds to the bank and what it gets when it lends them out will widen. But the key word here is “lend:” no loans, no spread.

Simply put, to take advantage of this money-making opportunity, the banks will have to loosen their lending standards a bit. This will help people buy houses, motor vehicles, home furnishings and other big-ticket items.

Naturally, this means better sales, earnings and dividends — all items that should warm an investor’s heart.

One more thing: Unless inflation runs rampant, interest rates are likely to return only to normal levels, not much higher. Once the stock market realizes this, it may even get to like higher rates.

After all, they are a sign that things are getting better. And isn’t this what investing is all about?