Federal Reserve hikes key interest rate to highest level in 22 years

[Social Media]

 

After briefly pausing its war on inflation last month, the Federal Reserve is resuming the battle by hiking its benchmark interest rate to the highest level in 22 years.

The central bank concluded a two-day policy meeting on Wednesday by announcing that it is raising the federal funds rate by a quarter of a percentage point, lifting the Fed's target rate to between 5.25% and 5.5%. 

The Fed left the door open to further rate hikes this year, with Chair Jerome Powell telling reporters in a news conference that additional tightening is possible unless inflation continues to cool rapidly.

"What our eyes are telling us is policy has not been restrictive enough for long enough to have its full desired effects. So we intend to keep policy restrictive until we're confident that inflation is coming down sustainably to our 2% target, and we're prepared to further tighten if that is appropriate," he said. "The process still probably has a long way to go."

 

 

The Fed's current rate-hiking cycle, its most aggressive push to tighten monetary policy since the 1980s, has proved effective in dousing the hottest bout of inflation in four decades by raising borrowing costs for consumers and businesses. 

Since the central bank began tightening in March 2022, mortgage rates have more than doubled while the costs of car loans and credit cards have surged. The hikes have also squeezed technology companies and banks that were reliant on low interest rates, putting some out of business and forcing others to cut tens of thousands of workers. 

 

FULL STORY

 

[Trippy]

That's Bidenomics, 555

[JonnyF]

More economic pain for normal, hard working American people.

 

Hopefully they will think very carefully before re-electing Biden.  

[sirineou]

Does that mean that the yield of US treasuries will increase?  

[placeholder]

55 minutes ago, Trippy said:

That's Bidenomics, 555

 

43 minutes ago, JonnyF said:

More economic pain for normal, hard working American people.

 

Hopefully they will think very carefully before re-electing Biden.  

Clearly, both of you are ignorant of the fact that the Federal Reserve operates independently of the White House. 

 

What's more, why do you think the Federal Reserve is raising rates? I won't tax your powers of divination any further so here's the answer: the economy is performing too strong for the Fed's liking with unemployment being near record lows. Curse you, Bidenomics and your too strong economy.

[Tug]

1 hour ago, JonnyF said:

More economic pain for normal, hard working American people.

 

Hopefully they will think very carefully before re-electing Biden.  

Hate to pop your balloon (well not really)the economy is humming along quite nicely now .they are saying looks like a soft landing (no recession) .historically low unemployment lots and lots of new civil projects starting ..nope things are markedly improving strong consumer confidence the TEAM of experts under the guidance of this administration are making remarkable progress especially when you think of the conditions when they started.it drives the republicans absolutely bonkers ???? 

[Skeptic7]

4 hours ago, sirineou said:

Does that mean that the yield of US treasuries will increase?  

Yup. 

[Purdey]

4 hours ago, Trippy said:

That's Bidenomics, 555

22 years ago it was George W. Bush -enomics. ????

[HappyExpat57]

6 hours ago, Trippy said:

That's Bidenomics, 555

The frightening thing is so many people are ignorant to what The Federal Reserve actually is and what it is not.

 

The Fed is NOT an official U.S. government entity. Biden has nothing to do with it, he doesn't control it, it is not anywhere within his purview.

 

The Fed IS a private body of bankers who are basically global marionettes, manipulating the markets under the false pretense of doing good for the world when in fact their sole interest is lining the pockets of mega banks by brokering loans with money that's NOT theirs from one country to another, taking their unfair share with every transaction.

 

The U.S. fought the Revolutionary War to get out from under the oppressive thumb of the Bank of England, and for a few short years this actually succeeded. Then the Bank of England morphed into The Federal Reserve and now we're right back where we started.

 

If you've ever seen "Game of Thrones," the bankers who loaned money to all the warring families is a frighteningly accurate comparison.

 

[Trippy]

1 minute ago, HappyExpat57 said:

The frightening thing is so many people are ignorant to what The Federal Reserve actually is and what it is not.

 

The Fed is NOT an official U.S. government entity. Biden has nothing to do with it, he doesn't control it, it is not anywhere within his purview.

 

The Fed IS a private body of bankers who are basically global marionettes, manipulating the markets under the false pretense of doing good for the world when in fact their sole interest is lining the pockets of mega banks by brokering loans with money that's NOT theirs from one country to another, taking their unfair share with every transaction.

 

The U.S. fought the Revolutionary War to get out from under the oppressive thumb of the Bank of England, and for a few short years this actually succeeded. Then the Bank of England morphed into The Federal Reserve and now we're right back where we started.

 

If you've ever seen "Game of Thrones," the bankers who loaned money to all the warring families is a frighteningly accurate comparison.

 

I was making a joke. 555 means ha ha ha. But hey, thanks for the history lesson.

[placeholder]

For what it's worth, lots of economists think the Fed in engaging in overkill. It turns out that the U.S. had the lowest inflation rate of all the G7 nations foir June. (Japan being the last of the G& nations to report  published its figures and theywere at 3.3% vs. U.S. 3.0%.) Also the way the US measures housing costs is different from most other countries. That part of the index should come down quickly, so core inflation should also follow.

[placeholder]

2 hours ago, HappyExpat57 said:

The frightening thing is so many people are ignorant to what The Federal Reserve actually is and what it is not.

 

The Fed is NOT an official U.S. government entity. Biden has nothing to do with it, he doesn't control it, it is not anywhere within his purview.

 

The Fed IS a private body of bankers who are basically global marionettes, manipulating the markets under the false pretense of doing good for the world when in fact their sole interest is lining the pockets of mega banks by brokering loans with money that's NOT theirs from one country to another, taking their unfair share with every transaction.

 

The U.S. fought the Revolutionary War to get out from under the oppressive thumb of the Bank of England, and for a few short years this actually succeeded. Then the Bank of England morphed into The Federal Reserve and now we're right back where we started.

 

If you've ever seen "Game of Thrones," the bankers who loaned money to all the warring families is a frighteningly accurate comparison.

 

No. The Fed is not a private body of bankers. The 7 member of the Board of Governors of the Federal Reserve are appointed by the President.

And where did you come up with the idea that the  "U.S. [sic} fought the Revolutionary War to get out from under the oppressive thumb of the Bank of England, and for a few short years this actually succeeded."? In fact, in 1782 The Bank of North America was created to become the defacto central bank to continue financing the war. 

And the Federal Reserve was created because without a central bank, the US was repeatedly subject to bank runs and financial collapses. In a modern economy there really is no alternative to a central bank. Perhaps the reason that the UK became the first center of the Industrial Revolution was because of the stable financial environment provided by the BoE.

[candide]

9 hours ago, JonnyF said:

More economic pain for normal, hard working American people.

 

Hopefully they will think very carefully before re-electing Biden.  

Just outperforming all other G7 economies for growth, in particular when compared to...ahem!

https://commonslibrary.parliament.uk/research-briefings/sn02784/

[Geordieabroad]

10 hours ago, JonnyF said:

More economic pain for normal, hard working American people.

 

Hopefully they will think very carefully before re-electing Biden.  

you can't vote for someone who's in jail

[stevenl]

4 minutes ago, Geordieabroad said:

you can't vote for someone who's in jail

You can.

But Biden ending up in jail seems unlikely.

[Dave0206]

9 hours ago, Tug said:

Hate to pop your balloon (well not really)the economy is humming along quite nicely now .they are saying looks like a soft landing (no recession) .historically low unemployment lots and lots of new civil projects starting ..nope things are markedly improving strong consumer confidence the TEAM of experts under the guidance of this administration are making remarkable progress especially when you think of the conditions when they started.it drives the republicans absolutely bonkers ???? 

Unlike 45 we never hear Biden taking credit on a daily basis for a booming economy. 

So it should be I should imagine for a large % of Republican voters they will own zero stocks so when trump kept going on about it why did it matter to them? But not matter now ? Perhaps they were altruistic back then? ???? please note I waited 10 minutes before I copied the word altruistic from another story 

[placeholder]

On 7/27/2023 at 9:14 AM, Trippy said:

That's Bidenomics, 555

 

On 7/27/2023 at 9:26 AM, JonnyF said:

More economic pain for normal, hard working American people.

 

Hopefully they will think very carefully before re-electing Biden.  

DISASTER HAS STRUCK!!!

 

GDP grew at a 2.4% pace in the second quarter, topping expectations despite recession calls

• Gross domestic product rose at a 2.4% annualized pace in the second quarter, topping the 2% estimate.
• Consumer spending powered the solid quarter, aided by increases in nonresidential fixed investment, government spending and inventory growth.
• A Commerce Department inflation gauge increased 2.6%, down from a 4.1% rise in Q1 and well below the estimate for a gain of 3.2%.

https://www.cnbc.com/2023/07/27/gdp-q2-2023-.html

[JonnyF]

27 minutes ago, placeholder said:

 

DISASTER HAS STRUCK!!!

 

GDP grew at a 2.4% pace in the second quarter, topping expectations despite recession calls

• Gross domestic product rose at a 2.4% annualized pace in the second quarter, topping the 2% estimate.
• Consumer spending powered the solid quarter, aided by increases in nonresidential fixed investment, government spending and inventory growth.
• A Commerce Department inflation gauge increased 2.6%, down from a 4.1% rise in Q1 and well below the estimate for a gain of 3.2%.

https://www.cnbc.com/2023/07/27/gdp-q2-2023-.html

Great news. I mean who cares if you can't pay your mortgage and lose your house due to high interest rates when news like this is released?

[Chomper Higgot]

8 minutes ago, JonnyF said:

Great news. I mean who cares if you can't pay your mortgage and lose your house due to high interest rates when news like this is released?

Let’s put a pin in that and come back to it when we discuss interest rates elsewhere.

[placeholder]

11 minutes ago, JonnyF said:

Great news. I mean who cares if you can't pay your mortgage and lose your house due to high interest rates when news like this is released?

The vast majority of mortgages in the US  last 30 years and are fixed interest.

[ozimoron]

On 7/27/2023 at 1:40 PM, Skeptic7 said:

Yup. 

what he said.

[heybruce]

4 hours ago, JonnyF said:

Great news. I mean who cares if you can't pay your mortgage and lose your house due to high interest rates when news like this is released?

What country are you posting from?

 

I assume it is not the US, because in the US the vast majority of mortgages are long-term fixed interest loans.  Raising interest rates only affect people who take out new home loans.  That tends to slow down home purchases, which tends to slow down the economy, which is the desired result of raising interest rates.  Inflation is the result of the economy running too hot.

[Skipalongcassidy]

Harris slammed for saying most can’t afford a $400 surprise expense: ‘Yeah, that’s called Bidenomics’

[placeholder]

1 hour ago, Skipalongcassidy said:

Harris slammed for saying most can’t afford a $400 surprise expense: ‘Yeah, that’s called Bidenomics’

How about calling this Bidenomics?

 

Low-Wage Jobs Are Becoming Middle-Class Jobs
Millions of low-income families are experiencing less financial stress and even a modicum of comfort.

"The yawning gaps between different groups of American workers—Black and white, young and old, those without a college degree and those with one—have stopped widening and started narrowing. Measures of poverty and income inequality are dropping."

https://archive.ph/aJSqo

https://www.theatlantic.com/ideas/archive/2023/03/wage-growth-income-inequality-labor-market/673277/