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Fed hikes rates as inflation worries push up bond yields

184 points · 250 comments · wslh

  1. dabinat · · focus · HN ↗
    Prediction: this causes a recession in two years, right after a Democrat wins the White House, who will be blamed for it. The economy will turn around after a few years, just in time for a Republican to win and claim they fixed it.

    This is how Republicans have a reputation for being economically savvy despite actual evidence to the contrary, because the general population doesn’t understand that economics runs on a time delay.

    1. marcosdumay · · focus · HN ↗
      It's interesting that this article doesn't have the rate...

      (It moved from 3.5% - 3.75% to 3.75% - 4%, the US uses a range, not a fixed number.)

      But this one is something that gets results almost immediately. We will see what it does in 2 or 3 months, not years.

      1. karp773 · · focus · HN ↗
        What results? Overnight interbank loan rates, yes, immediately. The effect of those rates on the economy? It will take time to propagate. Heck, some important committees only meet like twice a year.
        1. marcosdumay · · focus · HN ↗
          > What results?

          Inflation numbers, companies firing, and the magnitude of fictional numbers on financial markets.

          Lots and lots of things are slower to react, but those 3 are quite big and hard to ignore.

          1. carefree-bob · · focus · HN ↗
            Layoffs are abnormally low right now, well below the rate a decade before 2020.

            Here is data: <a href="https:&#x2F;&#x2F;fred.stlouisfed.org&#x2F;series&#x2F;JTSLDR" rel="nofollow">https:&#x2F;&#x2F;fred.stlouisfed.org&#x2F;series&#x2F;JTSLDR

            Inflation is a bit higher, but not shockingly so, here is the data:

            <a href="https:&#x2F;&#x2F;fred.stlouisfed.org&#x2F;series&#x2F;CPIAUCSL#" rel="nofollow">https:&#x2F;&#x2F;fred.stlouisfed.org&#x2F;series&#x2F;CPIAUCSL#

            In terms of &quot;fictional numbers on wall street&quot;, I don&#x27;t see any real data there, but if you have access to something then please share.

      2. Animats · · focus · HN ↗
        The current official US inflation rate is 3.4%. So the real interest rate is under 1%.
        1. marcosdumay · · focus · HN ↗
          The most relevant comparison is the short term treasure rates, that is currently at 4% for 3 months.

          What means that the US is still paying banks to take loans. They just fixed it so it pays very, very little.

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