Will the Fed Raise Rates?

The Rabbi

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Sep 16, 2009
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With ongoing weakness due to shitty Democrat policies showing up in the economic data, does anyone think the Feds will raise rates this year? I doubt it personally. They have committed themselves to an insane zero rate policy that has created distortions in the market and impoverished many middle class savers. But like drunks they keep repeating failure hoping for a different outcome.
This was easily predicted by Japan's experience over the last 20 years: government stimulus after stimulus with zero interest rates leading to bloated deficits and no growth.
Because monetary policy isnt the problem. Bad economic policy is the problem.
 
With ongoing weakness due to shitty Democrat policies showing up in the economic data, does anyone think the Feds will raise rates this year? I doubt it personally. They have committed themselves to an insane zero rate policy that has created distortions in the market and impoverished many middle class savers. But like drunks they keep repeating failure hoping for a different outcome.
This was easily predicted by Japan's experience over the last 20 years: government stimulus after stimulus with zero interest rates leading to bloated deficits and no growth.
Because monetary policy isnt the problem. Bad economic policy is the problem.
Yes ... someday.....
 
They have nowhere to go unless we start getting back to reality. Rate hike = death by runaway interest payment, neg rates = death by capital flight.
 
The Fed knows if they raise rates, the economy will weaken and revert to recession. So they seem to think that if they wait for the economy to strengthen, then raising interest rates won't lead to recession. They may have to wait a long time.
 
The Fed knows if they raise rates, the economy will weaken and revert to recession. So they seem to think that if they wait for the economy to strengthen, then raising interest rates won't lead to recession. They may have to wait a long time.
I think the assumption is flawed. Raising rates to 1-2% is not going to plunge the economy into recession. It might help, as savers will start to get some kind of return on their deposits.
 
The Fed knows if they raise rates, the economy will weaken and revert to recession. So they seem to think that if they wait for the economy to strengthen, then raising interest rates won't lead to recession. They may have to wait a long time.
I think the assumption is flawed. Raising rates to 1-2% is not going to plunge the economy into recession. It might help, as savers will start to get some kind of return on their deposits.
I suspect your assumption that at 1-2% raise will not plunge the economy into recession, is flawed. It just might and why would the Fed NOT do it, if they thought it would not hurt the economy?

When Volcker raised rates dramatically in the early 80s, we experienced a harsh but short lived recession, but then the economy took off. So raising rates might hurt in the short term, but will result in better economic conditions in the long term.

I agree that the savers are the one's getting hurt, with the ZIRP.
 
The Fed knows if they raise rates, the economy will weaken and revert to recession. So they seem to think that if they wait for the economy to strengthen, then raising interest rates won't lead to recession. They may have to wait a long time.
I think the assumption is flawed. Raising rates to 1-2% is not going to plunge the economy into recession. It might help, as savers will start to get some kind of return on their deposits.
I suspect your assumption that at 1-2% raise will not plunge the economy into recession, is flawed. It just might and why would the Fed NOT do it, if they thought it would not hurt the economy?

When Volcker raised rates dramatically in the early 80s, we experienced a harsh but short lived recession, but then the economy took off. So raising rates might hurt in the short term, but will result in better economic conditions in the long term.

I agree that the savers are the one's getting hurt, with the ZIRP.
They are locked into a mindset that raising rates will be a drag on the economy. But since lowering them to this level has not really helped, only created distortions, the fundamental premise needs to be revisited.
Volker raised rates to 2 points above the inflation rate. We're nowhere near that. 1-2% would be reasonable and probably beneficial.
 
The Fed knows if they raise rates, the economy will weaken and revert to recession. So they seem to think that if they wait for the economy to strengthen, then raising interest rates won't lead to recession. They may have to wait a long time.
I think the assumption is flawed. Raising rates to 1-2% is not going to plunge the economy into recession. It might help, as savers will start to get some kind of return on their deposits.
I suspect your assumption that at 1-2% raise will not plunge the economy into recession, is flawed. It just might and why would the Fed NOT do it, if they thought it would not hurt the economy?

When Volcker raised rates dramatically in the early 80s, we experienced a harsh but short lived recession, but then the economy took off. So raising rates might hurt in the short term, but will result in better economic conditions in the long term.

I agree that the savers are the one's getting hurt, with the ZIRP.
They are locked into a mindset that raising rates will be a drag on the economy. But since lowering them to this level has not really helped, only created distortions, the fundamental premise needs to be revisited.
Volker raised rates to 2 points above the inflation rate. We're nowhere near that. 1-2% would be reasonable and probably beneficial.
I agree that raising rates will be beneficial. My point is the Fed clearly believes raising rates, even 1-2%, will harm the economy and they are apparently unwilling to do it.
 
The Fed knows if they raise rates, the economy will weaken and revert to recession. So they seem to think that if they wait for the economy to strengthen, then raising interest rates won't lead to recession. They may have to wait a long time.
I think the assumption is flawed. Raising rates to 1-2% is not going to plunge the economy into recession. It might help, as savers will start to get some kind of return on their deposits.

I think current policy is correct. It helps compensate for liberal anti growth economic policies like high taxes, unions, deficits regulations and of course the liberal war on the schools and the family. .
 
The Fed knows if they raise rates, the economy will weaken and revert to recession. So they seem to think that if they wait for the economy to strengthen, then raising interest rates won't lead to recession. They may have to wait a long time.
I think the assumption is flawed. Raising rates to 1-2% is not going to plunge the economy into recession. It might help, as savers will start to get some kind of return on their deposits.

I think current policy is correct. It helps compensate for liberal anti growth economic policies like high taxes, unions, deficits regulations and of course the liberal war on the schools and the family. .
Its been a total failure. Household incomes have stagnated and unemployment is still high.
 
The Fed knows if they raise rates, the economy will weaken and revert to recession. So they seem to think that if they wait for the economy to strengthen, then raising interest rates won't lead to recession. They may have to wait a long time.
I think the assumption is flawed. Raising rates to 1-2% is not going to plunge the economy into recession. It might help, as savers will start to get some kind of return on their deposits.

I think current policy is correct. It helps compensate for liberal anti growth economic policies like high taxes, unions, deficits regulations and of course the liberal war on the schools and the family. .
Its been a total failure. Household incomes have stagnated and unemployment is still high.

yes stagnated because of the liberal policies, not because of monetary policy which prevented depression
 

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