When the cost of a home was roughly somebody’s average yearly salary, high interest rates were palatable
When the cost of a home is more like 5+ times the average yearly salary, high interest rates are suffocating
If you have existing debts locked in at lower rates, high rates/inflation can be potentially beneficial. Your debts devalue faster (and hopefully your income also inflates too).
If you want to get into new debts, this is very bad. When you consider structural wealth inequality, this is a slippery-slope that favors the big players, just like always under capitalism.
Income isn’t inflating at anywhere near the same rate as inflation or interest though
yeah asking for a 7% raise every year is nuts. But it shouldn’t be.
Can anyone explain to me if this is good or bad?
If you’re looking for a house, I think this is bad because the rate is crazy high and your monthly payment is gonna be nuts until rates drop and you can refinance.
For everyone else, it means The Federal Reserve has raised interested rates enough to at least stave off some of the consumption in the economy.
Should the Fed lower rates to start promoting growth again?
Government austerity is never a good thing. There are lots of ways of fixing inflation and governments everywhere chose to fuck over their own populations. The IMF is a disease.
The other side is, CDs (cash deposits) are now worth investing again. I’ve been pulling money out of stocks and into CDs and precious metals. I think we’re going to get hyper inflation as we cut off half the world’s resources and tech demands soar in combination with ripping another hole in our wallet to fund the burn pit of :ukkkraine:
