Most-Resident t1_j32flei wrote on January 5, 2023 at 4:29 PM

Reply to comment by Rote515 in US jobless claim applications fall to lowest in 14 weeks by AudibleNod

Inflation is coming down. Maybe the fed will turn the crank down some more but I don’t expect by much. I hope the job market stays strong and workers get raises.

TexButtery t1_j32k3mr wrote on January 5, 2023 at 4:57 PM

The fed wants inflation at or under 2.5%. They have a lot more work to do.

whynotjoin t1_j334t01 wrote on January 5, 2023 at 6:59 PM

The Fed feeling like they gotta drive the economy into the ground and ruin lives because congress won’t do anything is just so absurd.

The Fed keeps hammering away instead of asking for more/better tools or throwing the ball back at Congress for its failures. Particularly given how many of the issues causing inflation stem from things interest rates aren’t going to help without widespread pain- and likely unnecessary long term negative impacts.

Particularly given the Fed is also fighting potentially permanent/very long term shifts in the labor force that have been predicted for decades and were finally accelerated by the pandemic.

TexButtery t1_j34twg2 wrote on January 6, 2023 at 1:17 AM

The interest rates need to be higher. It encourages saving and less credit/loan usage.

Interest rates set near zero for years is asinine.

whynotjoin t1_j34uahl wrote on January 6, 2023 at 1:19 AM

Yes- however the speed they are doing it now is just as ridiculous as having them near zero for so long. Particularly given so many of the issues impacting the current inflation are minimally impacted by interest rates.

orlouge82 t1_j32ulct wrote on January 5, 2023 at 5:59 PM

Unfortunately, the Fed views its goal of tackling inflation to mean completely destroying any leverage workers have in the job market. They want wages to plummet because, for some asinine reason, they believe that higher wages is the primary contributor towards the recent spike in inflation.

ButtMilkyCereal t1_j34usai wrote on January 6, 2023 at 1:23 AM

They already did at the last fomc meeting. The increase was only 50 bps, and they had been doing 75 every 6 weeks all year. The meeting at the end of ja uary is likely to be another 50 bps.

It's important to remember that inflation lags significantly from the rate being set, as it takes time for businesses to curtail orders based on the interest rates they'll be paying, and an overcorrection is sig ificantly worse than an undercorrection.