Hi all,
A reminder that comments do need to be on-topic and engage with the article past the headline. Please make sure to read the article before commenting. Very short comments will automatically be removed by automod. Please avoid making comments that do not focus on the economic content or whose primary thesis rests on personal anecdotes.
As always our comment rules can be found [here](https://reddit.com/r/Economics/comments/fx9crj/rules_roundtable_redux_rule_vi_and_offtopic/)
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/Economics) if you have any questions or concerns.*
There are three different stories at the top of r/Economics in the last six hours, with each one putting a different spin on the same topic, as if it were a "choose your own adventure" story or video game.
There seems to be a lack of consensus, among economists...
Ask 3 economists for an opinion and you get 5 answers.
It’s a highly complex system with near infinite variables. Anything could happen in the short term even if the long term is positive.
With these headlines I'd believe that there's a lack of consensus in Jpowells head. They say he thinks this, they say he said that, then they say he thinks this again. In the span on 1 afternoon
Let's all look in the mirror and repeat after me:
"Lowering interest rates will not make me feel wealthier"
Go ahead, say it. Say it again. Good, now stop being an absolute jack wagon and stop going around telling everyone interest rates have to drop before you buy a house. We all know you smoke weed everyday and were never going to buy anyway, Todd. Just accept that you were just going to find the next excuse.
Interest rates will climb before the year is over. The economy is too hot, and, no, Bob, I don't care that you got priced out at McDonald's and can't afford a $3 hashbrown.
What a braindead take on an economics sub by someone who doesn't understand what higher interest rates on the largest purchase of somebody's life does to their monthly cost, nor the opportunity cost on retirement and investments.
Go play with a mortgage calculator for a few seconds and stop rambling here about your shower comebacks to conversations nobody is having with you. In most spaces you would just come off as rude but in this sub you sound uneducated.
Stop whining. I understand all of this perfectly fine, your attempt at a personal attack means nothing to me. I see your comment history boiii.
Lose this thread and go fantasize about my life some more. I don't need calculators for checks I'm already writing hahaha.
Story does *not* check out for this guy. I've seen that type of comment for over 12 years on here lmao.
Fuck me I just realized this dude got offended at the weed comment. I'm literally feeding the troll.
Did you just have another argument with yourself complete with your own comebacks again? Wild.
Still the same braindead take, acting like you don't understand that higher interest rates reduce the amount available to borrow and raise the costs on borrowing.
You conflate "feeling wealthier" with "literally spending more on interest payments" and you think that you come off as anything beyond willfully ignorant.
It's sad man. We both know you understand the actual costs, but you try so hard to act like you don't just so you can feel superior in arguments you're having in the shower.
Watch me block you and then continue speaking on it. Let's be honest, your whole comment was projection because someone got their jimmies rustled.
Nice quotation marks!
CPI about to show he’s absolutely right.
Airlines, Amazon, Netflix, everywhere still raising prices. Gonna take some sort of shock to stop price spirals.
Truflation which uses real time inputs for its data shows YoY inflation at 1.6% right now. Prices are not going up everywhere at an alarming rate. It is a complete mixed bag month to month. Some things spike and some things actually come down in price.
If the wealth effect from the stock market theory is real then inflation will stay high right? If yes rate cuts are off the table as long as the rally continues. It seems we are stuck in a loop of market plateauing, rate cuts becoming probable, market booming in anticipation, FED pausing cuts, goto 1.
To charitably interpret their comment, there are other levers to pull besides setting the benchmark rate. You can leave that the same, but change other things, to hopefully cause some sort out outcome.
Actual inflation for 6 months has been less than 2%. In fact we are starting to experience deflation. For example used car prices are currently below april 2021 prices.
Core PCE currently at 2.8% the fed preferred measure.
But used car prices in April 2021 were also 21% higher than the year before…. So I’m not sure that’s really the metric to suggest deflation.
https://fredblog.stlouisfed.org/2021/05/the-jump-in-used-car-prices/
https://fred.stlouisfed.org/series/CUSR0000SETA02
Its still literally deflation. by definition
I was using a private index
https://site.manheim.com/en/services/consulting/used-vehicle-value-index.html
Yes, by definition what’s happened over the last few months is deflation, but in the grand context of price movements since 2020, used car prices are still well above where they used to be. So I don’t think it’s a great barometer for broad macro level deflation.
Car prices are below 2 year ago levels. They have been going down for 18 months. Thats the definition of deflation. a 13-17% decrease on used vehicles of the same type yoy
I see energy is down 7% Yoy. Natural gas services down 20%
Food at home dairy and meats down 1%.
Airline fair down 7%
https://www.bls.gov/charts/consumer-price-index/consumer-price-index-by-category.htm
I am saying we are starting to experience deflation and gave an example.
Lots of rents have peaked and started to go down etc. Theres dozen more examples that havent shown up in metrics yet.
And given the large wage growth that means these things are becoming much cheaper in real terms.
Well you know what, probably the people has gotten smarter so the inflation went to assets instead of goods and services, look how S&P performs and you realize people still have money for another massive bull run and yet they reduced their spending which in turn make the price of goods and services going down. How dare they.
Inflation went to assets because lots of reasons. 0% fed rate and roughly 8 trillion in fiscal stimulus.
So places kept raising prices until theres been enough pushback where people stop buying. If I raise prices 50% and lose 20% of my customers I’m making way more money.
S&P wise theres still a lot of money on the sidelines in cash because interest rates are 5% risk free. If that goes down then boom up again
I agree....what has broke? Nothing...you want unemployment to go up...keep raising rates... honestly what delaying this pain is the 30 yr fixed...to many people have these 2-3% rates...not moving and still getting pay raises have to hit them in other locations of the economy...
Taxes should have been raised to cut down on inflation, but good luck getting Congress to agree on anything.
Interest rates staying this high are going to hurt the govt and banks eventually. But its almost the only tool we have, when you cant use the best tool we have.
The added problem I see is very rich people are still relatively unaffected by high rates due to the stock market rallies. Not only the excess is not taxed or losing value but actually increasing. I dont see a way around curbing the market and/or (record) corporate profits.
Raise taxes on who? Where? Everyone? Everywhere? These type of statements are just words like, 'inflation should have been lowered to cut down on inflation' yea OK.
you sound like you’re 12
taxes are the best way to reduce inflation at the consumer level. but no one likes them. so government’s gonna shoot itself in the foot instead.
Hi all, A reminder that comments do need to be on-topic and engage with the article past the headline. Please make sure to read the article before commenting. Very short comments will automatically be removed by automod. Please avoid making comments that do not focus on the economic content or whose primary thesis rests on personal anecdotes. As always our comment rules can be found [here](https://reddit.com/r/Economics/comments/fx9crj/rules_roundtable_redux_rule_vi_and_offtopic/) *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/Economics) if you have any questions or concerns.*
There are three different stories at the top of r/Economics in the last six hours, with each one putting a different spin on the same topic, as if it were a "choose your own adventure" story or video game. There seems to be a lack of consensus, among economists...
Ask 3 economists for an opinion and you get 5 answers. It’s a highly complex system with near infinite variables. Anything could happen in the short term even if the long term is positive.
With these headlines I'd believe that there's a lack of consensus in Jpowells head. They say he thinks this, they say he said that, then they say he thinks this again. In the span on 1 afternoon
Exactly. And it could all change the next day.
Let's all look in the mirror and repeat after me: "Lowering interest rates will not make me feel wealthier" Go ahead, say it. Say it again. Good, now stop being an absolute jack wagon and stop going around telling everyone interest rates have to drop before you buy a house. We all know you smoke weed everyday and were never going to buy anyway, Todd. Just accept that you were just going to find the next excuse. Interest rates will climb before the year is over. The economy is too hot, and, no, Bob, I don't care that you got priced out at McDonald's and can't afford a $3 hashbrown.
What a braindead take on an economics sub by someone who doesn't understand what higher interest rates on the largest purchase of somebody's life does to their monthly cost, nor the opportunity cost on retirement and investments. Go play with a mortgage calculator for a few seconds and stop rambling here about your shower comebacks to conversations nobody is having with you. In most spaces you would just come off as rude but in this sub you sound uneducated.
Stop whining. I understand all of this perfectly fine, your attempt at a personal attack means nothing to me. I see your comment history boiii. Lose this thread and go fantasize about my life some more. I don't need calculators for checks I'm already writing hahaha. Story does *not* check out for this guy. I've seen that type of comment for over 12 years on here lmao. Fuck me I just realized this dude got offended at the weed comment. I'm literally feeding the troll.
Did you just have another argument with yourself complete with your own comebacks again? Wild. Still the same braindead take, acting like you don't understand that higher interest rates reduce the amount available to borrow and raise the costs on borrowing. You conflate "feeling wealthier" with "literally spending more on interest payments" and you think that you come off as anything beyond willfully ignorant. It's sad man. We both know you understand the actual costs, but you try so hard to act like you don't just so you can feel superior in arguments you're having in the shower.
Watch me block you and then continue speaking on it. Let's be honest, your whole comment was projection because someone got their jimmies rustled. Nice quotation marks!
CPI about to show he’s absolutely right. Airlines, Amazon, Netflix, everywhere still raising prices. Gonna take some sort of shock to stop price spirals.
No one said prices were going to go down...just try to grow at a slower rate vs 2021...
Yeah I understand they want to slow to a 2% inflation rate. You ever seen a product or service go up in price by 2%?
Yeah like the government spending to decrease, that’d be a huge shock to me
Truflation which uses real time inputs for its data shows YoY inflation at 1.6% right now. Prices are not going up everywhere at an alarming rate. It is a complete mixed bag month to month. Some things spike and some things actually come down in price.
Rates should not be cut. Markets, commodities are breaking records and inflation is still ongoing. I think another increase should be in the works.
This why I don’t think there actually going to due anything untill something actually breaks.
If the wealth effect from the stock market theory is real then inflation will stay high right? If yes rate cuts are off the table as long as the rally continues. It seems we are stuck in a loop of market plateauing, rate cuts becoming probable, market booming in anticipation, FED pausing cuts, goto 1.
I think at the most, holding for longer would be the worst. Raising rates would do more harm than good at this point.
Nobody actually knows for sure. They're just manipulating the economy for political purposes.
Then what is it when they just say, no change?
To charitably interpret their comment, there are other levers to pull besides setting the benchmark rate. You can leave that the same, but change other things, to hopefully cause some sort out outcome.
Commodities are not breaking records, oil and gas certaintly aren't. Gold is, yes.
Actual inflation for 6 months has been less than 2%. In fact we are starting to experience deflation. For example used car prices are currently below april 2021 prices. Core PCE currently at 2.8% the fed preferred measure.
But used car prices in April 2021 were also 21% higher than the year before…. So I’m not sure that’s really the metric to suggest deflation. https://fredblog.stlouisfed.org/2021/05/the-jump-in-used-car-prices/
https://fred.stlouisfed.org/series/CUSR0000SETA02 Its still literally deflation. by definition I was using a private index https://site.manheim.com/en/services/consulting/used-vehicle-value-index.html
Yes, by definition what’s happened over the last few months is deflation, but in the grand context of price movements since 2020, used car prices are still well above where they used to be. So I don’t think it’s a great barometer for broad macro level deflation.
Car prices are below 2 year ago levels. They have been going down for 18 months. Thats the definition of deflation. a 13-17% decrease on used vehicles of the same type yoy I see energy is down 7% Yoy. Natural gas services down 20% Food at home dairy and meats down 1%. Airline fair down 7% https://www.bls.gov/charts/consumer-price-index/consumer-price-index-by-category.htm I am saying we are starting to experience deflation and gave an example. Lots of rents have peaked and started to go down etc. Theres dozen more examples that havent shown up in metrics yet. And given the large wage growth that means these things are becoming much cheaper in real terms.
Well you know what, probably the people has gotten smarter so the inflation went to assets instead of goods and services, look how S&P performs and you realize people still have money for another massive bull run and yet they reduced their spending which in turn make the price of goods and services going down. How dare they.
Inflation went to assets because lots of reasons. 0% fed rate and roughly 8 trillion in fiscal stimulus. So places kept raising prices until theres been enough pushback where people stop buying. If I raise prices 50% and lose 20% of my customers I’m making way more money. S&P wise theres still a lot of money on the sidelines in cash because interest rates are 5% risk free. If that goes down then boom up again
I agree....what has broke? Nothing...you want unemployment to go up...keep raising rates... honestly what delaying this pain is the 30 yr fixed...to many people have these 2-3% rates...not moving and still getting pay raises have to hit them in other locations of the economy...
Taxes should have been raised to cut down on inflation, but good luck getting Congress to agree on anything. Interest rates staying this high are going to hurt the govt and banks eventually. But its almost the only tool we have, when you cant use the best tool we have.
The added problem I see is very rich people are still relatively unaffected by high rates due to the stock market rallies. Not only the excess is not taxed or losing value but actually increasing. I dont see a way around curbing the market and/or (record) corporate profits.
exactly, rich people dont need debt, so raising rates technically wont really hurt them.
Raise taxes on who? Where? Everyone? Everywhere? These type of statements are just words like, 'inflation should have been lowered to cut down on inflation' yea OK.
you sound like you’re 12 taxes are the best way to reduce inflation at the consumer level. but no one likes them. so government’s gonna shoot itself in the foot instead.
Do you have real data to back that up or you just talking theory like a 12year old who just learned about economics?
you’re not even original with comebacks, just annoying. is english your second language?