Wait Wait Wait Seven Interest Rate Hikes?

a reply to: Jagman72

This is the moment in history where we are witnessing the end of a global empire and USD hegemony is wasting away, one week at a time. Give it a few years and the global financial system will be unrecognizable (not hyperbole... just reality)

originally posted by: JAGStorm
It's overdue but are they going to cram it all in a two year period!

Possibly, they don't always follow the proposed timeframes.

originally posted by: putnam6
Serious question

Okay so explain why 7 little incrementally hikes are better than say 2 or 3 or even 1 big hike rip the bandaid off.

It gives them a chance to see how the economy is reacting and moderate accordingly. They may not increase it as much or as rapidly as they initially stated and/or trim the size and amount of increases based on economic performance.

MOST of the Federal Reserve's influence (or FOMC in this case) is based on what they say and how the public perceives them, as opposed to what they actually do in terms of monetary policy. This is a well-known fact by institutional investors and professional speculators... take that for what you may

I just sold my house (40k over asking with no inspection with a bidding war and lowest start bid was 20 over asking). I had a mtg loan with a 2.25 interest rate (refied last year to get this rate from 2.75) and just bought a new build house (no bidding war - yeah, I found a unicorn) in another state - lowest available rate was 3.1 - with nearly perfect credit score. I paid some points to get it down to 2.3 fixed.

I am pretty sure - in the next few months, this will not be possible for much of anyone. I jumped while I could.

originally posted by: AugustusMasonicus

originally posted by: putnam6
Serious question

Okay so explain why 7 little incrementally hikes are better than say 2 or 3 or even 1 big hike rip the bandaid off.

It gives them a chance to see how the economy is reacting and moderate accordingly. They may not increase it as much or as rapidly as they initially stated and/or trim the size and amount of increases based on economic performance.

Right. And raising the interest rates too quickly could burst the economic bubble however too slowly could allow inflation to raise too quickly. Is there even a happy medium at this point? We're going to find out.

I think with their choice of stopping the bubble burst or stopping runaway inflation they will choose stopping runaway inflation. Wise choice because as has been shown in our history, recovering from a recession is doable and arguably short term. As for runaway inflation, that would undoubtedly have a domino affect and topple every major economy on earth.

Unfortunately though raising the debt ceiling and adding zeros will only work for so long. Eventually it will be time to pay the piper.

People are so spoiled.My first mortgage had a 10-1/8th interest rate. My last had a 3.75%, which was marginally lower than the 4.25% my parents paid in the fifties. Now people are proclaiming economic collapse because of a projected 1% increase over two years. LOL

originally posted by: schuyler
People are so spoiled.My first mortgage had a 10-1/8th interest rate. My last had a 3.75%, which was marginally lower than the 4.25% my parents paid in the fifties. Now people are proclaiming economic collapse because of a projected 1% increase over two years. LOL

It’ll be over 1% but I know what you are saying 8% was very common some 25-30 yrs ago.

If you do the math if the USA goes back to even 2004 levels of Fed interest rate which is 4% the interest on our 30 TRILLION of debt will be either the 3rd or the 2nd line item on our annual budget. So we are looking at 1 trillion a year in interest.

That is money not helping the American people at all but enriching our foreign investors who purchase our Treasury Bills. Oh also enriching the pockets of the Feds regional bank members who are on record 6 of the largest private banks in the USA. Contrary to popular belief the Feds regional banks are owned by private banks and they get paid profits from all the purchasing of us treasury bonds and stocks that the fed owns.


The fed has about 8 trillion on its assets balance sheet. Also, on record the fed in 2020 started purchasing stocks by the billions with invented electronic money. They used JP Morgan as a front to do it for them so they didn’t have to attract attention. This is all on record you can do the research.

Another interesting point is if you taxed every working American in the country at 100% and let’s take their whole paycheck for the whole year. 100% of your paycheck goes to the US government for the whole year. That is 180 million working taxpayers did you know if you do the math it would fund the US government for about 2 months at the current spending by congress.

This is how screwed we are.

Mark my words the Fed will never be able to raise rates past 2% ever again and these interest rate hikes will have more and more diminishing returns. The fed has painted themselves into a corner. They have to raise rates to fight inflation but the market will crash once they raise rates which will force them to stop raising rates meanwhile the inflation problem won’t be fixed because it’s a self fulfilling prophecy.

10 years of easy no interest rate coc aine money for Wall Street has screwed this country.

The Fed and congress IS responsible for the Inflation!
And they can’t fix it now.

Remember this quote from Milton Friedman:

“Inflation is and always will be a monetary phenomenon”

Supply chains my arse!

a reply to: JAGStorm

Hard times create strong men. Strong men create easy times. Easy times create weak men. Weak men create hard times.....it's a viscous cycle.

originally posted by: FamCore
a reply to: JAGStorm

with over $30T in national debt our own government couldn't even service the debt servicing payments at that point without MAJOR tax increases/defaulting on unfunded liabilities like medicaid/etc.

They won't get past 4 rate hikes (at MOST) before backing off and then the real rollercoaster in markets begins SMH

We are seeing the kind of misery we saw under Jimmy Carter which ended up with huge interest rates. My sister had a mortgage at 14% under Carter.

Raising the interest rates now to what was "normal" for many a past year to 5-8% is long overdue.

But under Biden who has engendered far more misery than Carter, we can probably expect interest rates to hit Carter highs.

a reply to: The2Billies

Yea that's how they broke the inflation bubble, but that was on 900 billion versus 30 trillion.

Rates must go up but they can't stay up or we can't pay on the debt.

Don't know how this group of clowns in DC will navigate this mess.

originally posted by: Alien Abduct
a reply to: JAGStorm

Hard times create strong men. Strong men create easy times. Easy times create weak men. Weak men create hard times.....it's a viscous cycle.

That’s why they say generational wealth only lasts three generations.

a reply to: JAGStorm

Ah, reliving Carter's greatest hits.

originally posted by: ketsuko
a reply to: JAGStorm

Ah, reliving Carter's greatest hits.

One of the things that happened was that people were so leery of the stock market.
I can see it.

Major stock market "crash". The rich salivating for the lows, and they swooooooop in buying at rock bottom prices and
ensuring untold wealth with the growth comes back. The same will probably happen to real estate.

a reply to: JAGStorm

Sure we are making too much money, all those covid relief checks make half of the population rich.

Democrats love the Fed, love to stick to the working class.

Bend over please.

originally posted by: marg6043
Sure we are making too much money, all those covid relief checks make half of the population rich.

Democrats love the Fed, love to stick to the working class.

Er, those checks didn't come from the Federal Reserve, they came from the Treasury because Trump and Congress pushed for and authorized them.

originally posted by: marg6043
a reply to: JAGStorm

Sure we are making too much money, all those covid relief checks make half of the population rich.

Democrats love the Fed, love to stick to the working class.

Bend over please.

Don't fall into what they want. If they keep you fighting you won't see that this is really all of us against the ultra rich.
We are all the same to them, doesn't matter if you are Dem or Rep...Middle class or poor, or working poor.
We are all like cattle.

originally posted by: schuyler
People are so spoiled.My first mortgage had a 10-1/8th interest rate. My last had a 3.75%, which was marginally lower than the 4.25% my parents paid in the fifties. Now people are proclaiming economic collapse because of a projected 1% increase over two years. LOL

Ah, you must have bought in the early 80's ours was in the low 9's and we waited because that was bargain

originally posted by: AugustusMasonicus

originally posted by: putnam6
Serious question

Okay so explain why 7 little incrementally hikes are better than say 2 or 3 or even 1 big hike rip the bandaid off.

It gives them a chance to see how the economy is reacting and moderate accordingly. They may not increase it as much or as rapidly as they initially stated and/or trim the size and amount of increases based on economic performance.

Well yes anybody that knows the definition of incrementally could have figured that out. Though I appreciate the effort to dumb it down for me, Im just a little dismayed you think Im in the 8th grade.

So essentially we don't know what is gonna happen but we are gonna try this and if it's wrong we can pull back

Sounds like the first time I had sex