Federal Reserve Raises Interest Rates By 25 Basis Points

[Likkmee]

Federal Reserve raises benchmark rate by 0.25 point despite bank turmoil​

​

God knows how many more billions of dollars of bonds just sank beneath the waves.

The Fed was looking at 50 basis points, but I guess the banking crisis gave them some second thoughts.

That's same as a few weeks back. 25......x 2. Dem sheeples wont notice !

 

[multivita-man]

Remember how Silicon Valley Bank had a lot of depositors whose accounts were a gajillion dollars over the FDIC insured amount?

Well, the US government made those depositors whole anyway.

Talk about moral hazard!

This sums it, IMO. We may escape from this banking wobble, but central banks have set the stage for what could turn out to be the mother of all financial crises in the future. When it happens is anyone's guess, but there are different scenarios for this to go sideways.

The market indices are still overpriced, IMO. You wouldn't know that there's inflation or that we just had a small banking crisis by the way that investors are behaving, and that's because they are expecting central banks to continue backstopping their risk.

This won't end well.

 

[DudleySmith]

Actually it is in the Fed dual mandate to lower or raise interest rates to keep inflation at 2 percent.

The second part of their mandate is to maximize employment.

You are consistently wrong, man.

the ZIRP policy is only intended to be a short term policy, not one that runs for many years as it did currently. Bankers were aware of that, but just didn't give a shit, they can count on bailouts and let taxpayers eat the losses.

 

[multivita-man]

That is precisely what is driving inflation. Consumer demand spiked to its highest level in history after the pandemic. All that stimulus money was burning a hole in their pockets.

Meh, I think we're past that point now. Your median household is spending, but that spending is being financed less and less by their savings and more and more with credit.

Total Household Debt Reaches $16.90 trillion in Q4 2022; Mortgage and Auto Loan Growth Slows - FEDERAL RESERVE BANK of NEW YORK

www.newyorkfed.org

The Report shows an increase in total household debt in the fourth quarter of 2022, increasing by $394 billion (2.4%) to $16.90 trillion. Balances now stand $2.75 trillion higher than at the end of 2019, before the pandemic recession.

The ones who are driving inflation are the same ones who are doing all of this "investing" and they have one hell of a lot more money than those who got excited over their 2020 pandemic windfall. I mean in the grand scheme of things, a few thousand dollars blows up quickly, especially when inflation is near 40-year highs.

It's Wall Street that's driving inflation, not Main Street.

 

[DudleySmith]

The market indices are still overpriced, IMO.

^^^This, grossly so; too much cash floated to the top, and they ran out of places to put it so drove up stocks, meanwhile not nearly enough cash trickles to the bottom, and the lack of disposable income hurts the domestic economy, 70% of which depends on retail services and the like. But right wingers want to peddle the idiot myth that the inflation is caused by printing money to feed the lower classes, lol. They have it ass backwards. They need to print money for the lower calsses because the top brackets are hoarding over 80%-90% of incomes.

 

[DudleySmith]

The ones who are driving inflation are the same ones who are doing all of this "investing" and they have one hell of a lot more money than those who got excited over their 2020 pandemic windfall. I mean in the grand scheme of things, a few thousand dollars blows up quickly, especially when inflation is near 40-year highs.

It's Wall Street that's driving inflation, not Main Street.

^^^ Exactly. Too many duopolies and monopolies in nearly every sector of the economy, and they are run like financial instruments, not producers of goods and services, hence not any genuine job creation or 'trickle down' going on. All those tax cuts were just nonsense fallacies re helping the economy. they didn't do anything but accelerate the income squeeze on the working and middle class.

 

[WEATHER53]

Wow.

Just...wow.

Try to use your big words when cherry picking part of a statement.

 

[multivita-man]

^^^This, grossly so; too much cash floated to the top, and they ran out of places to put it so drove up stocks, meanwhile not nearly enough cash trickles to the bottom, and the lack of disposable income hurts the domestic economy, 70% of which depends on retail services and the like. But right wingers want to peddle the idiot myth that the inflation is caused by printing money to feed the lower classes, lol. They have it ass backwards. They need to print money for the lower calsses because the top brackets are hoarding over 80%-90% of incomes.

Inflation is going to be a persistent problem, and I'm not sure when, or even if, we will see a return to the 2% target that the Fed has held as a standard. Part of the problem is monetary policy; the other part that rarely gets discussed as an economic problem is our brewing ecological disaster, which is going to start causing spurts of inflation (see the price of eggs as a possible sign of what is to come).

But what worries me as much in the shorter run is that central banks appear to be now beholden to big finance. The Fed and the Treasury bailed out these "regional" banks because big time investors like Bill Ackman went on Twitter and other social media and screamed "fire" in a crowded theater, and basically told everyone on Fin-Twitter that if central bankers didn't give into their demands that they were going to incite a global banking panic.

We are fucked.

 

[WEATHER53]

0 interest rate for years and they are surprised people bought stuff so now The People must get draconian punishment again for their own good.
Fed 101

 

[BluesLegend]

As a fiscal conservative borrowing and spending like there's no tomorrow seems insane. But much of the country is in party on mode.

 

[Missourian]

That happens when rates rise. Can't keep zero rates forever.

But when banks make terrible monetary decisions and the banks fail, the banks may lose, and the investors may lose, but the depositors that lose their money had nothing to do with those bad bets.

When you put money in the bank, it is to keep it safe.

 

[Missourian]

Yeah, exactly.

This very thought has had me wondering how long it takes to feel the full effect of an increase in the rate. Maybe the Fed is moving too fast now to make up for being asleep at the switch.

They weren't asleep at the switch IMO.

Their decision was intentional and politically motivated.

 

[Missourian]

Imagine you had a token which was worth $50, but today it is worth $25. If you go around begging for a loan, ordinary lenders will only accept your collateral as being worth $25.

And then magically, wonderfully, incredibly the Fed says they will value your piece of shit at $50.


That's what is going on at the discount window.

That spike tells me something really, really bad is going on.

My question is, how underwater is underwater?

Surely not close to half....right?

 

[multivita-man]

Cathie Wood’s ARK sells Coinbase stock for the first time in 2023

Cathie Wood’s investment firm ARK Invest has sold 160,887 Coinbase shares from its ARK Fintech Innovation ETF for $13.5 million.

cointelegraph.com

Cathie Wood’s investment management firm ARK Invest is moving to take profits from its Coinbase shares, selling its first batch of Coinbase stock in 2023.

On March 21, ARK sold 160,887 Coinbase shares from its ARK Fintech Innovation exchange-traded fund (ARKF) for $13.5 million, according to an investor notification seen by Cointelegraph.

The transaction became ARK’s first sale of Coinbase stock in 2023, following three months of active buying. The amount sold accounts for 23% of all Coinbase stock acquired by ARK so far in March and about 9% of all Coinbase shares bought by the firm so far this year.

Coinbase gets Wells notice from U.S. SEC over Earn product, wallet

Coinbase Global Inc said on Wednesday it had received a notice from the U.S. Securities and Exchange Commission warning that the cryptocurrency exchange could face a civil action over some of its products.

www.reuters.com

March 22 (Reuters) - Coinbase Global Inc (COIN.O) said on Wednesday it had received a notice from the U.S. Securities and Exchange Commission warning that the cryptocurrency exchange could face a civil action over some of its products.

Shares of Coinbase were down nearly 12% at $68.18 in extended trading.

Hmmm...good timing.

 

[1srelluc]

The dow was spooked today more by Yellen saying that depositors would not be bailed out more than the FDIC allows than the .25 basis point increase.

U.S. Treasury Secretary Janet Yellen is not considering covering all uninsured deposits at U.S. banks while ruling out the need for a broad boost in deposit insurance, she told members of the Senate's Appropriations Subcommittee on Financial Services and General Government on Wednesday.

 

[citygator]

That is precisely what is driving inflation. Consumer demand spiked to its highest level in history after the pandemic. All that stimulus money was burning a hole in their pockets.

No it didn’t. Show me on a chart where demand spiked.

 

[DudleySmith]

As a fiscal conservative borrowing and spending like there's no tomorrow seems insane. But much of the country is in party on mode.

It's weird but since they already went into ZIRP Land it made sense to jack up spending a lot while the interest rates were effectively negative. Many Foreigners were desperate to park money in the U.S. dollar before the COVID thing, so the bonds sold well. Japan did the same thing.

 

[DudleySmith]

But when banks make terrible monetary decisions and the banks fail, the banks may lose, and the investors may lose, but the depositors that lose their money had nothing to do with those bad bets.

Wrong. Depositors are lenders; they're lending their money to the bank. Banks are borrowing money short term to buy long term debts and make long term loans. They always fail sooner or later, unless they get bailed out or their debtors don't default. When there is a run on the bank they lose deposit margins, their lending stops while their obligations continue. If they made solid loans they can weather it; if they made bad loans their revenue ceases at precisely the time they need revenue the most. Some get lucky, most need to be rescued sooner or later.

 

[imawhosure]

The dow was spooked today more by Yellen saying that depositors would not be bailed out more than the FDIC allows than the .25 basis point increase.

U.S. Treasury Secretary Janet Yellen is not considering covering all uninsured deposits at U.S. banks while ruling out the need for a broad boost in deposit insurance, she told members of the Senate's Appropriations Subcommittee on Financial Services and General Government on Wednesday.

It is all about politics, plain and simple. Very few of our political class, have any idea on what to do, and that includes both party's. Oh sure, they can both preach about societal evolution, but neither........so far, has a grasp on economics.

There is little doubt, that someone who came up with the solution, backed by others who also knew what to do, would be shouted out of the politcal spectrum, as Americans would, and refuse to stand the pain it would take to fix this disaster.

Anyone who is dumb enough to think Bush fixed it, only has to look at the national debt to know it was kicked down the road. Biden and Trump reignited it, and here we are again. Oh sure, they did it for opposite reasons politically, but to say our guy is correct because we want to sink the ship for our reason and not yours is crazy.

On this board, we want to believe what our people say from a political perspective. If it sounds easy, they are lying to you; plain and simple, no matter which party they reside in, or who/whom they are. If it was was easy and virtually painless, it would have been implemented long ago. The President who did this would be up there on Mount Rushmore, don't you think!

The further we slide down this hole, the harder our choices have to be; sad but true. This is the new choice-----------> who are Americans going to throw under the bus. We either decide, or we go under the bus with everyone else.

You are the deciders, honestly! When you vote, how you vote, and if you vote for reality is all upon you!

 

[Lesh]

Federal Reserve raises benchmark rate by 0.25 point despite bank turmoil​

​

God knows how many more billions of dollars of bonds just sank beneath the waves.

The Fed was looking at 50 basis points, but I guess the banking crisis gave them some second thoughts.

Several times you mentioned that “something really bad is going on”

What are you referring to?