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Rote515 t1_j32av7i wrote

Reply to comment by MasterpieceLive9604 in US jobless claim applications fall to lowest in 14 weeks by AudibleNod

It’s actually the opposite, as it almost assuredly means that the Fed will raise rates again, the Fed is currently trying to cool the job market to control inflation.

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Most-Resident t1_j32flei wrote

Inflation is coming down. Maybe the fed will turn the crank down some more but I don’t expect by much. I hope the job market stays strong and workers get raises.

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TexButtery t1_j32k3mr wrote

The fed wants inflation at or under 2.5%. They have a lot more work to do.

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whynotjoin t1_j334t01 wrote

The Fed feeling like they gotta drive the economy into the ground and ruin lives because congress won’t do anything is just so absurd.

The Fed keeps hammering away instead of asking for more/better tools or throwing the ball back at Congress for its failures. Particularly given how many of the issues causing inflation stem from things interest rates aren’t going to help without widespread pain- and likely unnecessary long term negative impacts.

Particularly given the Fed is also fighting potentially permanent/very long term shifts in the labor force that have been predicted for decades and were finally accelerated by the pandemic.

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TexButtery t1_j34twg2 wrote

The interest rates need to be higher. It encourages saving and less credit/loan usage.

Interest rates set near zero for years is asinine.

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whynotjoin t1_j34uahl wrote

Yes- however the speed they are doing it now is just as ridiculous as having them near zero for so long. Particularly given so many of the issues impacting the current inflation are minimally impacted by interest rates.

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orlouge82 t1_j32ulct wrote

Unfortunately, the Fed views its goal of tackling inflation to mean completely destroying any leverage workers have in the job market. They want wages to plummet because, for some asinine reason, they believe that higher wages is the primary contributor towards the recent spike in inflation.

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ButtMilkyCereal t1_j34usai wrote

They already did at the last fomc meeting. The increase was only 50 bps, and they had been doing 75 every 6 weeks all year. The meeting at the end of ja uary is likely to be another 50 bps.

It's important to remember that inflation lags significantly from the rate being set, as it takes time for businesses to curtail orders based on the interest rates they'll be paying, and an overcorrection is sig ificantly worse than an undercorrection.

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DependentAd235 t1_j32s5yf wrote

It’s still good in some ways though because shits complex. Interest rates being so low is what made houses so damn expensive.

Prices went up because people could “afford” them. Fortunately fixed rate loans are popular in the US so interest rates going up should lower house prices at some point.

(Also banks will actually have to pay interest on their loans instead of basically getting free money from they Fed.)

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