Free money is coming back!
Europe is already down to 3.5 percent.
Yeah, there is a bigger push since most those countries are variable rates for more of their sectors. Their interest rates are always quicker to adjust. I’ve been paying 2.4 on my home and .4 on my car for the past 3 years. I’m just not getting new credit.
Consensus is that the variable rate model is overall cheaper but the fixed rate model reduces risk and encourage growth.
I’ll wait a year or two for the rates to fully catches l catch up and enjoy not having my mortgage payment jumped up $600 for the past 3 years tyvm.
Right. A lot of European countries use ARMs a lot more. The only other country where 30-year fixed is the norm is Denmark, as far as I know. But Europe just generally have lower interest rates.
Jerome Powell looks pretty stringy, but I bet I can grind him up into cat food.
Okay, but only if he lives on a vegan diet.
Inflation is over guys, prices are stable now and everything is totally fine. Nothing to see here yall!
Would you prefer they keep rates high? Inflation has dropping pretty consistently for months and was 2.5% y/y last month. Food price inflation was even lower y/y. What action would you prefer the Fed take?
Honestly I think the rate should’ve dropped by 2 or 3 whole percentage points (so like 200 or 300 basis).
The current rates are OBSCENELY HIGH and have not halted inflation even if they have attenuated it to some extent.
The Fed likely knew this damage would occur from this kind of tampering and only now are they acting to curb it.
They’re not obscenely high, they’re obscenely high for our lifetimes, I grew up in the 80s and these are adorable.
But I actually agree with you, our economy has a lot of really f-d up things because we lived on free money so long, we needed to wean slower because otherwise really, REALLY bad things were going to happen (SVB was the tip of the iceberg).
Rates are not high. 20 years ago they were higher yet - and people are cheering the historically low rates. However if you don’t remember 20 years ago it is easy to think they are high now when in fact they are probably closer to normal.
Do you mean 25 years ago? Twenty years the rate was around 1%. Back in July of 2000 it went up to about 6.5%. But inflation was on the rise at that point. It has sharply declined now.
Inflation may have fallen, but prices haven’t. Additionally, my annual pay is still $12k below where it should be had it only kept up with inflation over the last four years, no raises included.
Anecdotal data isn’t worth much, but I think it’s clear that Americans largely feel the same pressures.
Prices don’t fall. You don’t want prices to fall. Prices falling is bad.
Inflation is the overall increase in prices. If I inflate a tire at 10 PSI/sec and then I slow the inflation to 5 PSI/sec, the tire is still inflating. Saying prices have not fallen is a given since that has not really happened since the Great Depression. If the Fed kept interest rates high despite lowering inflation we eventually would have gotten deflation which is something we absolutely, positively do not want. Wage increases have outpaced price inflation since early 2023. Inflation was greater than wage growth in 2021 and 2022 so your experience sucks but it doesn’t seem to be the norm.
That data is made of averages which aren’t worth a lot when you discuss people’s feelings about the economy, and also not everyone is getting a raise equally. Many don’t get one at all and those people are definitely still dealing with prices being higher.
Additionally, the cumulative rate of inflation over the last four years is over 20%, so unless my annual salary rises to be at least that much higer than it was four years ago then my real buying power has still decreased. It doesn’t matter that the average raise is outpacing inflation if I never receive enough raises to at least keep up.
States with laws that are hostile to workers - as mine is - make it hard to find employment where your employer will increase your pay to at least track inflation. This kind of thing gets lost in the discussion of averages.
The comment on this article that you were originally responding to was most certainly one of frustration. I feel that frustration too. Just because a person might have a wealthy neighbor while they live in poverty doesn’t really mean that, on average, everyone is doing fine. It still means some are still hurting.
I have an B.S. in Economics, by the way.
That’s the thing, it’s Congress being a limp dick that forces the Fed to fight inflation with rate raises that inevitable ends hurting workers.
If the inflation induced by the monopolization of key industries and pure greed would have been addressed by legislative action restoring the free market and clawing back windfall profits through smart taxation, people would be better off and would not be looking to elect a fascist.
The “Fed only has this one tool” situation is a false dilemma. Inflation is not the root problem, the oligarchy is.
