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Fed hikes rates as inflation worries push up bond yields

184 points · 250 comments · wslh

  1. bwb · · focus · HN ↗
    Get ready for a fun ride my friends :)

    Fun ride =

    Oil is going up, possibly for a long time, which will have a big inflationary effect on everything. And it appears the USA government has lost the conflict it started and effectively given control over key oil delivery channels to Iran. Not to mention Saudia facing real issues from rebel groups / Yemen (simplification).

    Government debt is high in several key economies, and the bond market is being saturated with AI-related bonds, as well as possibly people finally tired of lending the USA/France/UK money at low rates and demanding higher ones. And with higher interest rates and bonds rolling over it means more and more money going to pay for the debt, rather than core services.

    Wild cards lurking in the bushes... AI, AGI, RSI.

    And yonder you have a nuclear power floundering; its only source of hard currency is being rightfully degraded, and its leadership delusional.

    And the one to watch IMO... Russian wheat export ability: wheat prices are up considerably, and combined with inflation from oil, this is the kind of stuff that creates waves of political change like the Arab Spring.

    1. leptons · · focus · HN ↗
      This comment isn't helpful. Please explain for those of us without a degree in economics.
      1. kadoban · · focus · HN ↗
        Inflation is high, so interest rates need to go up to try to slow that, but the economy isn't doing amazing already, and higher interest rates won't help that.

        Not to mention the US debt is _high_ as hell and bond yields mean that's more expensive.

        And the country is run by a broken fool who has no interest or ability to fix any of that.

        1. hdgvhicv · · focus · HN ↗
          It’s worse than no ability to fix it — he caused a large part of it for unclear reasons
          1. Supermancho · · focus · HN ↗
            > he caused a large part of it for unclear reasons

            Technically it was Besset, but Trump gave him the reigns.

            The purpose seems to be to radically debase the dollar and setup a crises that requires an entitlement cut (Social Security) for "the good of the economy" while also expanding military spending at the same time.

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