its already pretty clear by looking at the housing market that raising rates even just a few percent makes a ton of difference. i think i tend to agree with the wait and see approach - inflation clearly heading in the right direction - and the impacts of overshooting (recession/depression/mass layoffs) would be worse than undershooting imo.
The feds biggest mistake was not that they arent raising rates enough - its that they didnt start raising them soon enough.
I have never hated any internet poster more than Klang Fool on bogleheads. And no ignore function!
Is it really though? You’re talking about the cost to borrow money. I get that in a relative sense a 1 percent to 2 percent rate increase is a “doubling of rates” while an 11 to 20 is not, however, you’re still only paying 1 percent more interest on your loans as opposed to 9. The absolute numbers matter way more. You’re paying way more raw interest under the latter scenario.
Well competitive forces should drive things down, I don’t really know any mainstream economic theory that would disagree. If current incumbents won’t lower prices eventually new market entrants will. Additionally, the increasing cost of credit due to higher interest rates should impact demand but again this takes time to play out.
IMHO the way to counter at this point isn’t to jack the rates to the moon, it is to leave rates at 4.5-5 percent for an extended period even if the risk markets suck and we hit a recession. Raising rates to like 10 percent will crush inflation by replicating 1932 economic conditions.
Like, for example, say you’re the CEO of Volkswagen or BMW. You are reporting earning in Euros, you can adjust your factory pretty easily to make cars to US specs rather than European specs. If the dollar has gone up 15% against the Euro but you can’t raise prices by 15% in Europe then there is a strong profit incentive to produce more cars for the US market at the expense of other markets even at reduced prices. This may not happen this year but it will.
I dislike him also. I have also spent some time on Chiefsplanet, so he’s never reaching most hated poster status with me.
couldnt agree more, going from 0 to 5% in less than a year is a big deal that could have unforseen consequences that wont be seen until later on down the road, once it gets to 4-5% after the december hikes leave it there for 6-12 months and reassess. whatever data the fed is using seems to be lagging they were 6-12 months late on starting rate hikes and i wouldnt be surprised if they are also late on stopping rate hikes and overshoot,
Yeah it seems they’ve hiked rates enough.
https://twitter.com/carlquintanilla/status/1583630218769551361?s=46&t=VVMufLvCWtCpXN1RIuyq2Q
“Inflation is starting to / about to/ is easing” has been the take everywhere every month since December of ‘21 tho.
I’m no finance major, and I don’t pretend to know as much as the rest of you on this topic in this thread. I just know how bad it was when I went to the grocery store this morning (and I’m already on all store brands and shopping frugally, and I would consider myself pretty well off financially). This shit needs to get under control. The amount of money I”m spending on just basics like milk, eggs, bread, chicken and cereals is ridiculous. All store brands.
It’s going to be interesting. The housing market has completely ground to a halt so those prices are going to fall soon. Food costs…idk. If I had to guess they’re going to be very sticky/permanent
There’s probably something to say here about the United States completely giving up on antitrust.
Once Nabisco found out all us fat asses would pay $5.89 for Oreos, why would they ever charge less?
Repeat for everything else.
I’m ok with food prices sticking at current levels, but hte fucking weekly increases is going to cause a lot of pain for people who make less money than me, which is a lot of people.
I was just in France. People there don’t take this shit. The contrast is pretty striking. Service workers in France can afford to live reasonably well. They have health care, maximum hours, guaranteed retirement, etc. it was so depressing to see. We let like .001% of people rent seek away resources that could be used to provide a decent quality of life to tens of millions of people. It’s fucking disgusting.
I paid 7.99 for 18 eggs the other day 
It’s really bad
Maybe you’re just really bad at shopping. I just bought a dozen eggs at Trader Joe’s for like $3.00.
I think it was a 1-off, average price for a dozen is around 4$ locally. They were 99 cents a year ago 🤷
THAT’S SOCIALISM!!!
