fed fatigue

junior1

Well-Known Member
May 29, 2001
7,366
8,327
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Is anybody else getting a little fatigued by the fed actions over the past year and a half or so?
First they waited until too late to shift from an easing to a tightening telling the public that they had everything under control, in spite of economists calling for the end of QE
Then, after a $1.9 trillion american rescue plan stimulus they tell us inflation, but it's transitory. In spite of economists saying that this act was inflationary.
Now after 4 seventy five basis point rate hikes that are beginning to slow down the economy (already causing a housing market recession) the chairman stands before the press and gives a statement on the way forward for interest rates.
The FED hasn't been right about their rate movements and economic impacts this century...they were wrong in 2001, 2008, 2018, 2020......but this time they know what they're doing........right.
 

Sullivan

Well-Known Member
Nov 24, 2001
14,088
14,689
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Is anybody else getting a little fatigued by the fed actions over the past year and a half or so?
First they waited until too late to shift from an easing to a tightening telling the public that they had everything under control, in spite of economists calling for the end of QE
Then, after a $1.9 trillion american rescue plan stimulus they tell us inflation, but it's transitory. In spite of economists saying that this act was inflationary.
Now after 4 seventy five basis point rate hikes that are beginning to slow down the economy (already causing a housing market recession) the chairman stands before the press and gives a statement on the way forward for interest rates.
The FED hasn't been right about their rate movements and economic impacts this century...they were wrong in 2001, 2008, 2018, 2020......but this time they know what they're doing........right.

Yes. They should have only raised rates yesterday by 1/2%. 1/4% in December, and then wait it out to see the overall impact on the economy.

They might also want to accelerate the sale of securities.
 
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PSUEngineer89

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Aug 14, 2021
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I've got "we all misunderstand how things work, but we wear a bowtie and work in DC so trust us" fatigue.
 
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bdgan

Well-Known Member
May 29, 2008
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Is anybody else getting a little fatigued by the fed actions over the past year and a half or so?
First they waited until too late to shift from an easing to a tightening telling the public that they had everything under control, in spite of economists calling for the end of QE
Then, after a $1.9 trillion american rescue plan stimulus they tell us inflation, but it's transitory. In spite of economists saying that this act was inflationary.
Now after 4 seventy five basis point rate hikes that are beginning to slow down the economy (already causing a housing market recession) the chairman stands before the press and gives a statement on the way forward for interest rates.
The FED hasn't been right about their rate movements and economic impacts this century...they were wrong in 2001, 2008, 2018, 2020......but this time they know what they're doing........right.
IMO the fed should stop raising rates immediately. They've already killed the housing market. They would be killing autos except for the fact that pent up demand exceeds supplies due to the chip shortage.

We also have a phenomenon where we have 10 million job openings vs only a couple million people looking. The Fed would have to push rates near 10% to force unemployment materially higher. Not a good move IMO.

I think the Fed should stop raising short term rates and just focus on gradually selling off the balance sheet. That would normalize the yield curve and slow the economy more gradually.

P.S. The Fed will be fighting against government spending for years to come. I estimate that $4 trillion of Biden's "excess spending" has yet to hit the economy. How crazy is it that the government is flooding the economy with money while the fed is fighting in the opposite direction.
 

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