Fed hikes interest rates by 75 basis points for fourth straight meeting

  

Category:  News & Politics

Via:  snuffy  •  4 weeks ago  •  21 comments

By:   Snuffy

Fed hikes interest rates by 75 basis points for fourth straight meeting
How soon before the Administration acknowledges that recession is gonna make Carter look good?

S E E D E D   C O N T E N T



The  Federal Reserve  on Wednesday raised its benchmark interest rate by 75 basis points for the fourth straight month as it struggles to bring runaway inflation under control, a move that threatens to further slow U.S. economic growth and exacerbate financial pain for millions of households and businesses.

The three-quarter percentage point hikes in June, July, September and November — the most aggressive series of increases since 1994 — underscore just how serious Fed officials are about tackling the inflation crisis after a string of alarming economic reports. Policymakers voted unanimously to approve the latest super-sized hike.

The widely expected move puts the key benchmark federal funds rate at a range of 3.75% to 4%, the highest since before the 2008 financial crisis. It marks the sixth consecutive rate increase this year. 

However, the Fed also hinted at the possibility of smaller rate increases at future meetings as policymakers acknowledged that tighter monetary policy takes time to work its way through the economy. 

"The Committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time," the Fed said in a new sentence added to its post-meeting statement. 


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Snuffy
Masters Guide
1  seeder  Snuffy    4 weeks ago

While the news turned the stock market up, what will the future bring with this latest increase?  How bad will the recession next year be?  Will it make Carter look like an economic genius?

Trump is off-topic.

 
 
 
Snuffy
Masters Guide
1.1  seeder  Snuffy  replied to  Snuffy @1    4 weeks ago

Fairly certain had a Republican been in the White House,  with two quarters of negative GDP (first &second quarters) the Democrats would have been all over shouting about a recession.  And if people are honest about themselves, they would admit the only reason why the third quarter GDP was not negative was due to a reduced trade deficit.  But the official word is that we won't see recession until next year and it will be mild.  

With this and other news (diesel fuel shortage, inflation) just how expensive will this winter be?  Wonder how the Democrats can redefine the verbiage to help lessen the pain to come?

 
 
 
magicschoolbusdropout
Sophomore Principal
1.1.1  magicschoolbusdropout  replied to  Snuffy @1.1    4 weeks ago
Fairly certain had a Republican been in the White House,  with two quarters of negative GDP (first &second quarters) the Democrats would have been all over shouting about a recession.

And wanting to "IMPEACH" !

 
 
 
Texan1211
Professor Principal
1.1.2  Texan1211  replied to  Snuffy @1.1    4 weeks ago
Fairly certain had a Republican been in the White House,  with two quarters of negative GDP (first &second quarters) the Democrats would have been all over shouting about a recession. 

And definitely not trying to change the commonly accepted use of the word 'recession'.

 
 
 
Texan1211
Professor Principal
2  Texan1211    4 weeks ago

The Biden WH celebrated inflation earlier this week.

They seem very proud of it being so high.

 
 
 
Jack_TX
Masters Quiet
3  Jack_TX    4 weeks ago

The market has actually bounced since the announcement.  I think people were afraid it would be a full percent.

 
 
 
Snuffy
Masters Guide
3.1  seeder  Snuffy  replied to  Jack_TX @3    4 weeks ago

Too bad that bounce was so short lived.  Wonder what this will do for the market long-term however.  

 
 
 
Jack_TX
Masters Quiet
3.1.1  Jack_TX  replied to  Snuffy @3.1    4 weeks ago
Too bad that bounce was so short lived. 

Wow.  Was it ever.

Wonder what this will do for the market long-term however. 

Don't we all wish we could see that coming?  

The election should be good.  Historically, midterm election years are not very good for the markets, but the following years are.  Fingers crossed.

 
 
 
Snuffy
Masters Guide
3.1.2  seeder  Snuffy  replied to  Jack_TX @3.1.1    4 weeks ago
Don't we all wish we could see that coming?   The election should be good.  Historically, midterm election years are not very good for the markets, but the following years are.  Fingers crossed.

I was listening to a financial report the other day, I forget who the guest was.  He was stating that the coming recession next year will be big, not as big as the dot-com burst but significant none the less.  But he was putting recovery as strong and predicted a market around 100,000 by the end of the decade.  All I could say at the time was I'll have what he's smoking.  A gain like that in 8 years would be great for my retirement, but that seems like wishful thinking to me.  

Wonder what the odds of that are compared to winning the next Powerball drawing...   

 
 
 
Revillug
Freshman Guide
4  Revillug    4 weeks ago

The common wisdom is that in order to kill inflation interest rates need to be raised to the point that they are no longer effectively negative rates. With inflation rates at something like 9 percent that means the the interest rates are going to need to be raised that high.

A softer landing could be achieved if other factors in the economy could be brought under control. 

Putin has disrupted world energy and food supplies. That is certainly not helping.

But there also seems to be some price gouging on the part of American corporations, with oil companies getting particularly comfortable with record high profits from record low production.

We really need to see some more progress on the "too few goods" side of the problem.

 
 
 
Texan1211
Professor Principal
4.1  Texan1211  replied to  Revillug @4    4 weeks ago

I don't see much concern from the Biden Admin. regarding inflation other than rhetoric.

In fact, they seem proud that it is as high as it is, and effectively took some responsibility (at long last) for some of it anyway. Sure, they tried to spin it so it wouldn't sound so bad to a handful of voters not concerned with their own finances.

 
 
 
Revillug
Freshman Guide
4.1.1  Revillug  replied to  Texan1211 @4.1    4 weeks ago
I don't see much concern from the Biden Admin. regarding inflation other than rhetoric.

They don't have the votes in congress to do anything, so that leaves us with rate hikes and quantitative tightening from the Fed.

A windfall profit tax to discourage price gouging (which is apparently being spent on stock buy-backs) might accomplish something.

Some of the areas of the economy that are struggling with labor shortages could probably benefit from some immigrant labor.

Other than grandstanding to throw the bums out, does the GOP have any plans to address inflation? 

 
 
 
Texan1211
Professor Principal
4.1.2  Texan1211  replied to  Revillug @4.1.1    4 weeks ago
They don't have the votes in congress to do anything, so that leaves us with rate hikes and quantitative tightening from the Fed.

But the Biden WH was trying to take credit for high inflation just this week.

Are they wrong about that? 

Some of the areas of the economy that are struggling with labor shortages could probably benefit from some immigrant labor.

With record numbers coming over the border, I really can't blame labor shortages on immigration and border policies.

 
 
 
Texan1211
Professor Principal
4.1.3  Texan1211  replied to  Revillug @4.1.1    4 weeks ago
They don't have the votes in congress to do anything,

Democrats control both houses of Congress and the WH.

If they can't get the votes from their own, perhaps it is time to adjust their policies to be more palatable to at least their own members.

 
 
 
Snuffy
Masters Guide
4.1.4  seeder  Snuffy  replied to  Texan1211 @4.1.3    4 weeks ago
They don't have the votes in congress to do anything,
Democrats control both houses of Congress and the WH. If they can't get the votes from their own, perhaps it is time to adjust their policies to be more palatable to at least their own members.

Maybe they should have added something else to the Inflation Reduction Act.  Have to wonder if they thought that inflation just wasn't that bad, if they had no ideas or if they just wanted to ignore the problem.

 
 
 
Ronin2
Professor Quiet
4.1.5  Ronin2  replied to  Revillug @4.1.1    4 weeks ago
A windfall profit tax to discourage price gouging (which is apparently being spent on stock buy-backs) might accomplish something.

You do realize that businesses don't pay taxes- they pass those along to the consumer?

How much pain do you want the consumer to feel? We are a pretty pissed off already.

 
 
 
Jack_TX
Masters Quiet
4.1.6  Jack_TX  replied to  Revillug @4.1.1    4 weeks ago
They don't have the votes in congress to do anything,

That has not stopped them spending like a bunch of drunken sailors on shore leave.

 
 
 
Revillug
Freshman Guide
4.1.7  Revillug  replied to  Texan1211 @4.1.3    4 weeks ago
Democrats control both houses of Congress and the WH.

I think everyone in the GOP, including you, has heard of the filibuster.

 
 
 
Revillug
Freshman Guide
4.1.8  Revillug  replied to  Ronin2 @4.1.5    4 weeks ago
You do realize that businesses don't pay taxes- they pass those along to the consumer?

Nice talking point, but a windfall profit tax would be harder to pass along.

 
 
 
Texan1211
Professor Principal
4.1.9  Texan1211  replied to  Revillug @4.1.7    4 weeks ago
I think everyone in the GOP, including you, has heard of the filibuster.

Sure. But Democrats are the majority in both Houses of Congress and control the WH.

Any failures on their part are theirs alone.

 
 
 
Jeremy Retired in NC
Professor Guide
4.2  Jeremy Retired in NC  replied to  Revillug @4    4 weeks ago
Putin has disrupted world energy and food supplies.

So you're running with the "it's Putin's fault" fallacy.  Everybody laughed at Biden when he said it.  You don't think you'll get laughed at as well?

 
 

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