Thread

1. dabinat · 1789588567 · 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. carefree-bob · 1789594347 · focus · HN ↗

      A 0.25% rate hike is going to cause a recession? How, exactly, would that happen?

      Honestly it seems your post is heavy on politics but I am not seeing an actual argument anywhere in there.

      My canned response to people being upset at various policies or ratios, whether it is inflation, or bond yields, or market movements, is to ask them what they think the correct value should be. Stop complaining about the movement and instead ask them for their target. You think a 4% FedFunds is too high or too low? What do you think the correct value is and why? You think the stock market is too high or too low, what do you think the correct value of the index should be?

      Most people, who were just moments ago vociferously complaining about a movement, when asked this question fall silent, because they have no idea what the target should be, and because they have no idea about the target, they really have no business complaining about movement. Instead, they use the movement as a springboard to air their ideological beefs. But if you are going to tie some thesis to a rate hike, you better be able to explain what you think the correct rate should be and why. I'm waiting.

      Personally, I think a 4% rate is perfectly fine. 5% may even be warranted, and historically this has not been a high rate, if you assume, say, 2.5% inflation and 2% GDP growth, this is a pretty reasonable place to be.

      1. datsci_est_2015 · 1789645481 · focus · HN ↗

         Bring this energetic criticism onto Warsh, whose speech was nauseatingly political in comparison to his predecessor. Paraphrasing ~ “I’m not data-driven, I’m trend-driven”. Frankly speaking, he sounded like a dumbass who failed his way upwards into a position of meaningful power, much like the rest of the government at the moment. Warsh also refused to give a target or a forecast.

         The OP that you’re criticizing is simply making a prediction, and he doesn’t work at the fed.

         1. almog · 1789647407 · focus · HN ↗

            It was hard to watch and ended abruptly. Perhaps the only 2 reporters that kind of tried to challenge the contradictions in his approach were Nick Timiraos and Michael McKee.

            I think that one obvious question that no one asked him, is why not cancel the post FOMC press conference if he opposes forward guidance and won't even explain what data guides his vote when asked about it.

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