zero percent interest rates for 7 years and $3 Trillion in QE is new and experimental
Who is enforcing the mathematics inlaid with those numbers, so that every American would have to need, and be fulfilled, in the understanding of your suggestion?
The federal reserve is driving the bus here, we are in an unprecedented era of monetary policy, that should color every notion of how well we are or not doing. Fiscal policy likewise to some degree.
For example if Obama spent $1T in deficit stimulus, the fed monetized it, and GDP grew by $0.5T then I would call that sort of desperate. Others just look at the $0.5T GDP gain and proclaim success. Not saying it isn't possible to make it out of all this ok, I am saying that this is not normal by historical standards and kind of unsettling.
You keep bringing up the Fed as part of your argument that the economy is "in the tank," but the nature of your remarks suggest you are either not macroeconomically/Fed savvy or not current on the state of the economy.
Why? Because it's almost certain that the Fed will raise interest rates this year, perhaps even in September. That's something the Fed has refrained from doing almost entirely in anticipation of clear and broad reaching indications that the economy is doing well. "
If there were something that might persuade the [Fed] to boost rates, it would likely be some sign that the economy was doing better than anticipated, significantly better."
- Federal Reserve Could Hike Interest Rates in September
- 16-Aug-2016 -- NY Fed President Dudley:
- "[T]he labor market is getting tighter and we’re starting to see signs of wage gains starting to accelerate, so I think we’re getting closer to that point in time when it will be appropriate to actually raise short-term rates again.”
- "[T]he question is whether there is enough economic growth to put pressure on resources that pushes up wages and, ultimately, inflation. 'So far we seem to be on that trajectory and we’ll have to see how it plays out in coming months.'”
- Federal Reserve 'close to meeting targets' for US economy - BBC News
- 21-Aug-2016 -- Fed Vice Chairman Stanley Fischer
- In a speech in Colorado, the Fed's number two policymaker was upbeat about the economy's recovery and prospects. "We are close to our targets," he said on Sunday, adding that jobs growth had been "remarkably resilient".
- "Mr Fischer said this year's pace of jobs growth, although slower than in 2015, was "more than enough" for the labour market to continue to improve."
- "In recent years, he said, the US economy had had to confront the Greek debt crisis, a rise in the strength of the dollar, and sporadic financial turbulence."
"Yet, even amid these shocks, the labour market continued to improve: employment has continued to increase, and the unemployment rate is currently close to most estimates of the natural rate. I believe it is a remarkable, and perhaps under-appreciated, achievement that the economy has returned to near-full employment in a relatively short time after the great recession, given the historical experience following a financial crisis."
- Janet Yellen: Fed rate hike odds have 'strengthened'
- "But the job market bounced back in June and July, adding over a half million jobs in the that period. Yellen highlighted the job market's improvement and "solid growth" in consumer spending. Experts agree."
- "The consumer is actually doing pretty good and there are elements of the labor market doing better," says Phil Orlando, senior portfolio manager at Federated Investors in New York."
- 26-Aug-2016 -- Fed Chairwoman Janet Yellen:
- "I believe the case for an increase in the federal funds rate has strengthened in recent months."
- "While economic growth has not been rapid, it has been sufficient to generate further improvement in the labor market."
I said we are in a new monetary era, I did not say we are 'in the tank'. The fed has kept the ship afloat, the question is if this is a sustainable path. Clearly I think the answer is no as the fed itself keeps talking about escape velocity which never seems to happen. It could be now, but this is a historically long time for a recovery. Yellen has now changed her tune to QE and is trying to prepare congress to accept a permanent large balance on the fed ledger.
I know all about the interest rate increases, it changes nothing, we should have had many by now instead of one. I know all about the labor market, it is doing well but wages have been not so hot.
Asset prices (stocks, housing, etc.) seem to be inflating much faster than inflation or wages. The fed fears we might be creating a third bubble in 20 years, however they are starting to think that bubbles are the new economy as well. Bubbles are nice on the way up, we all loved the late 90s.
The trillion dollar question is when another recession hits, then what? the fed today has a pretty empty barrel so about the only thing left is helicopter money which is an even more dangerous experiment.
you really need links to plots that are easily looked up? I would have thought you were more savvy than that and probably were already aware, I will post later.
