It really goes to show how scared the Federal Reserve is of the current economic situation. They keep the interest rates high, essentially putting a damper on the economy because they think inflation could get so bad it’d be even worse.
Russian central bank is doing same thing in an attempt to control inflation. I believe they’re at 16% right now & 7~8% inflation.
I think the Ukrainian war is the cause of much of this. The Iranian situation of course threatens to raise inflation even further.
Biden’s in a tough position. It’s a very good thing the president can’t control the Federal Reserve. I would have dropped the rate if I were him.
Biden’s in a tough position. It’s a very good thing the president can’t control the Federal Reserve. I would have dropped the rate if I were him.
Remember how Trump was badgering the Fed to lower rates in 2019 (before the pandemic) because of his disastrous tax handout to the rich and trade war with China? I wish more people did.
The thing is a 5-6% interest rate isn’t really “high”, it’s on the low side of normal:
It’s only “high” in comparison to the irresponsibly low interest rate we’ve had since 2008. This isn’t “scared”, it’s hopefully a return to stable financial policy. The people who are complaining loudest about this are the financial parasites that have gotten used to getting free money from the government for so long.
I hope the fed keeps it like this for the next 20 years.
the financial parasites that have gotten used to getting free money from the government for so long.
Actually the government is giving out free money now as opposed to 0 interest rates where it wasn’t. The fed rate is the overnight rate you get for depositing money into the fed, not borrowing money from it. If I’m a bank and I have $1,000 at the end of the day and didn’t find anything to invest it in then I’ll deposit it at the fed and get say 5% apy as interest from the fed. If you did that every night for a year you’d get $50 from the fed while taking almost no risk, about as close to free as a capital gain can be called free. This has the effect of pushing up interest rates across the board because why would I invest in some risky business venture for 5% when I can get 5% with no risk from the government. The government is basically paying capital owners to not invest in riskier loans and bonds, cooling the market.
If you want to see financial parasites there are plenty of people right now with millions in Treasury bonds collecting even more interest from the government while doing nothing.
Don’t get me wrong their are plenty of parasites and con men that show up in the highly speculative world of 0% interest rates, *cough crypto *cough, but it’s not a matter of low interest rates good for capitalists and high interest rates bad.
It really goes to show how scared the Federal Reserve is of the current economic situation. They keep the interest rates high, essentially putting a damper on the economy because they think inflation could get so bad it’d be even worse.
Russian central bank is doing same thing in an attempt to control inflation. I believe they’re at 16% right now & 7~8% inflation.
I think the Ukrainian war is the cause of much of this. The Iranian situation of course threatens to raise inflation even further.
Biden’s in a tough position. It’s a very good thing the president can’t control the Federal Reserve. I would have dropped the rate if I were him.
Remember how Trump was badgering the Fed to lower rates in 2019 (before the pandemic) because of his disastrous tax handout to the rich and trade war with China? I wish more people did.
The thing is a 5-6% interest rate isn’t really “high”, it’s on the low side of normal:
It’s only “high” in comparison to the irresponsibly low interest rate we’ve had since 2008. This isn’t “scared”, it’s hopefully a return to stable financial policy. The people who are complaining loudest about this are the financial parasites that have gotten used to getting free money from the government for so long.
I hope the fed keeps it like this for the next 20 years.
Actually the government is giving out free money now as opposed to 0 interest rates where it wasn’t. The fed rate is the overnight rate you get for depositing money into the fed, not borrowing money from it. If I’m a bank and I have $1,000 at the end of the day and didn’t find anything to invest it in then I’ll deposit it at the fed and get say 5% apy as interest from the fed. If you did that every night for a year you’d get $50 from the fed while taking almost no risk, about as close to free as a capital gain can be called free. This has the effect of pushing up interest rates across the board because why would I invest in some risky business venture for 5% when I can get 5% with no risk from the government. The government is basically paying capital owners to not invest in riskier loans and bonds, cooling the market.
If you want to see financial parasites there are plenty of people right now with millions in Treasury bonds collecting even more interest from the government while doing nothing.
Don’t get me wrong their are plenty of parasites and con men that show up in the highly speculative world of 0% interest rates, *cough crypto *cough, but it’s not a matter of low interest rates good for capitalists and high interest rates bad.