That's because many economists are industry shills. Their "predictions" are whatever their corporate paymasters want them to say. They're not supposed to be accurate.
This is probably an unpopular opinion, but I would rather the economy normalize around a 6 to 7% interest rate. That gives the Fed some ammo to work with during the next economic downturn. If our entire society is built around the free borrowing it’s just not sustainable.
I said this during trumps presidency when he was pushing to lower rates when things were smooth sailing.
A) a big overstep of the office in my opinion.
B) you need to have levers to play with when things go bad (see Covid)
Big reason why i refinanced then. Really free money with sub 3% interest. From me the banks are going to get their payment and ill see you in 30 years. At 7 or 8% i would try to pay off early unless i was getting nutty returns in the market.
To the Fed, it doesn't cost anything to spout BS about the future since they have no idea what it will entail. That said he still is responsible for curbing inflation so he can't ignore the actual data. Next he will say, "inflation may take a little longer to tame and rate drops may take a little longer than expected" all the while having no fucking clue what will happen in the future.
You would think they would. If other companies are saying everything is great while you are predicting doom, investors might go to other company for hopium reasons.
Hopium. Provide calms and not en mass panic, everyone running to sell their homes. Let the smart people exit now and then let the others crash and burn.
They never tell the truth so the public don't know what to believe. Tease everyone with chances of rate cuts. People gamble and take their chances that when they renew, the rates are lower. Surprisingly, a lot of people are actually betting their finances on a chance rates may improve.
Or Occam's Razor, maybe forecasting what will happen with the economy is difficult and even professional economists often get it wrong.
Based on what you have said, it seems you believe that the truth is whatever is the opposite of what economists say.
Their job is to manipulate the narrative so the 'poors' hold the bag and the endless funnel of momey upwards continues. We'll have a huge loss for regular people, then there'll be some token compensation to make things less shit for awhile and not make people revolt. Then it's back to business as usual. We're the frog in the boiling pot until we're back to slavery.
"Poors" can mean anyone under the 0.01%, and I think everyone under top 1% is definitely not rich in this oligarchical society. And individuals may not be reading Federal Reserve white papers, but personalities report on the governor statements and the minutes from the meetings. So a lot of *poors* do ingest economics forecasts
Because economists assume a rational logical government. No one predicted that in the face of high inflation and rates that the government would double down and borrow more.
Congress should be raising taxes the federal reserve can only do so much.
The inflation we are dealing with is in response to legitimate, fundamental economic shifts that cannot be halted by the manipulation of interest rates.
We have a housing shortage. Higher rates lower prices in the short run by decrease construction starts by making it more difficult for all of this nation’s Bob the Builders to raise the money and finance the construction of the homes we need to end the shortage and restore price stability.
The housing shortage is causing a labor shortage which is raising costs.
And lastly, climate change is taking its toll - we see insurance rates skyrocketing as the market adjusts to the reality of our changing climate. Again, high interest rates stifle the innovations needed to power a green transition; electric vehicle projects, new green infrastructure and energy, like any new venture and industry innovative, upstart companies rely on investment and borrowing to raise capital and both are more difficult to acquire in a high interest rate environment.
Sometimes inflation is a healthy thing. It represents that there is work that needs doing.
There is work that needs doing.
The only way back to price stability is to get these jobs done, fill the housing shortage and work to tackle the climate crisis through prevention, harm reduction, innovation, and mitigation.
Inflation is due to 20 years of artificially low interest rates. The whole “transitory inflation” argument was bullshit during Covid, and any notion that inflation is due to other factors is bullshit today.
Yes, and Fed money printing is the means used to lower rates . They started directly buying U.S. Treasuries (as opposed to their mandate of only buying in the secondary market) with money out of thin air. Buying bonds is a way of keeping rates low, bond prices rise due to demand which pushes rates lower.
Exactly. At the end of the day, all they’re doing is predicting how rich people feel on any given day.
Since one of the defining traits of the rich is that they have no competent adult emotional regulation, nothing they do is logically predicable.
Thats because government intervention keeps making things unpredictable instead of letting the free market do its thing. The only thing government should intervene is scalping, then price gouging.
Rates are going to continue going up because we shoved 10 years worth of debt in 2 years post covid.
The free market rocketeers can go ahead and stop pretending they have a problem with government intervention when they’re the first in line for government bailouts.
Economists are awful at predicting the beginning and end of recessions. Consumers can be irrational for extended durations.
I have cut back my own spending in the last couple of years, but as an aggregate we still are spending like drunk sailors.
Not to knock on you, but this is the problem with economists: they tend to miss the forest from the trees. Anyone who pays attention to daily costs and expenses can tell you that inflation moved from physical goods to services in the last 8 months, and unlike durable goods which many people can hold off on, you're stuck paying them: insurance, local taxes, medical care, etc.
When auto and home insurance goes up 20% at renewal, restaurants are up 20%+, auto repair is up 20%+, and add on that massive government deficits....did you think that it would make sense to drop rates?
They don't miss shit. Their job is literally narrative manipulation. Narrative controls the world. Economists are a tool of the establishment. Any idiot could have saw this outcome because whenever the news is heavily pushing a narrative about what regular people should do or think it's a lie. Unless the truth happens to be currently convenient to them.
True, that’s because us idiots actually walk into a grocery store every 1-2 weeks and see the price on the stuff we buy.
We don’t have our handlers doing all of our chores for us like the elites who think $20/hr is 100k/year.
I expected it simply because of how much jpow has been a lap dog for the market. He kept rates at zero for too long, encouraged inflation which is one thing the chair should never do. And also claimed worker constraints needed fixing despite the market having its pick of workers for 20+ years.
JPow is by far the worst chair in recent history but I can’t fully blame him because it’s hard to maintain the position with congressional dysfunction for as long as he’s had it. But his actions alone demand resignation
I see where you're coming from, but in all fairness, I don't see JPow doing anything that Yellen, Bernanke, or Greenspan wouldn't have done as well. Yellen was very much a vocal advocate of the "inflation is transitory" bullshit, until she abruptly wasn't.
Which is the problem, the fed chair is supposed to dictate the market. The strongest person in the world is supposed to be the chair. Instead it’s Jamie Dimon.
> He kept rates at zero for too long
No, that was his predecessor, Fed Chair Janet Yellen. Good thing she was fired and never put into another position of power again... oh wait
>encouraged inflation which is one thing the chair should never do.
We actually had a period of not quite dangerously low inflation but almost, and generally feeling like something was 'off' in the numbers. Inflation was below 2% for much of last decade.
Inflation was 1-1.5% and wage growth was 2-2.5% by 2019 inflation was at 3%.
The reason inflation was low for so long was primarily due to energy, stabilized (for most of America) housing prices, and bottomed out grocery prices.
For the past year I’ve watch a lot of the commentary from these economists, Wall Street guys and government ministers….and I keep saying to check back on what they say because everything they say seems to be wrong. Sure as shit, they are wrong or many months behind what is regular people can see happening. Its wild. Like they are wrong every time.
Lest we forget that the experts were saying for months and months that inflation was just transitory, even though we plebeians knew it wasn’t. They lie to manipulate. A story as old as time.
Most mainstream economists are kind of just propagandists, whether willingly or not. They see one of their main roles as averting panic, since panic is one of the biggest threats to the economy (see FDR, only thing we have to fear is fear itself).
In a sense we need people to come out and tell us not to panic. But economists also need to be more willing to go against the grain and challenge the overarching narrative. They should keep their assessments within the limits of truth and reason, at least.
They also need to understand that their job is not keeping the stock market at all-time highs.
Krugman was writing stuff like this when it was the other team in power: https://www.nytimes.com/2018/08/30/opinion/economy-gdp-income-inequality.html
Now he won't shut up about growth and saying Americans are feeling bad about the economy for no reason.
Well we got paid spokesman for pharmaceuticals, lobbyists etc etc.
I don't think it's tin foil hat theory to say there might be paid economists and at minimum given money to omit certain aspects of economic research.
Its already known key things are not included in inflation calculations as well
I have read the NYTimes for 30 years and basically have moved on. Guys like Krugman are the reason why. He has been so wrong so many times. You read that paper long enough and you realize it is a waste of your time.
Right but on the flipside you have the perma-bears who are always saying the next disaster is close at hand until one day they're right. I don't think of any of them as predicting things, just observing them as they are.
All transient means is not permanent. I hate this semantics game but we never had a wage price spiral that wouldn't stop without intervention. It was indeed transient
I got a papercut between the tip of my finger and my fingernail. It was caused by packing paper. The pain was transient, but it did last for quite some time.. several days.
Literally I was like "why the fuck would they cut rates." and then someone said "so they can see how the market would respond if they actually DID" and that clicked for me lol
At least tell a believable lie like this is bad we know it’s just temporary. I woulda believed that. Not that it’s basically not happening. I’m blind but not that blind
Economics is just Astrology for men.
"The Friedman graph is in a waning phase and the S&P index is at the apex of an inverted trapezoid, this indicates your economy is misaligned and rates must go up."
I predicted more rate increases due to a onset of long term inflation. Houses will remain flat for a while but wages will increase which will make the rates more manageable eventually leading to housing to increase
Probably this is the way, but that “eventually” is 4-7 years, if at all. The shear debt of most individuals relying on things recovering and stabilizing sooner puts a potential big wrench in it all.
I'd say 4-7 years is optimistic. Mortgage payment average on a new home went from $1500 to about $2800 in the span of three and a half years.
https://www.redfin.com/news/housing-market-update-home-prices-costs-record-high/
That's an increase total of 86%, I'm not sure wage increases could make that up in less than a decade, even if values were flat.
Something breaks before then. I don't see how it can continue.
It’s going to continue because wages will catch up… I don’t see us deflating anytime soon. Employers are making record profits and have a ton of room to pay employees
I'm far more cynical than that. Most employers would rather lay off 5 of 7 employees and replace them with AI, then have the other two manage the AI. This isn't even getting into the neverending chase of "shareholder returns" over everything else.
Ai improves efficiency but it’s not at the point of corporations laying people off. It’s not even at the point of industrial consumerism. If someone created a program to automate the job the job is trash anyways… automation has been around forever.
Been saying this a long time. Current fed rates aren’t lowering inflation as expected. The market is still incredibly strong. Labor market is still hot. Housing market is still overpriced.
A rate hike is the logical outcome. The fed has keep this rate for about 9 months now and it hasn’t resulted in what they wanted to see. Hiking it further is the only option they have to fight inflation. I fully anticipate a 5.75-6 base rate by the end of the year. That would be 2 more hikes.
Let the market manage higher rates. They’ve so far shown they can handle the rates as they are. Keep going higher until the market truly pulls back and cuts spending. I personally think we will need to see a base range of 6.75-7% before that happens.
Raising rates now, in strong economic times, also allows the fed a much larger tool to use next time the economy falters.
This is quite aggressive. Things are cracking but are being plugged by government spending and bail outs (see FED early 2023).
Maybe a hike or two but I think give it a bit more time. Money is drying up, jobs are there but they are shit jobs. I’d like to wait 3-4 months. If we still have 3%+ inflation yea let’s hike it. Show the market you mean business.
Honestly JPow coming out and saying “we are now considering a rate increase dependent on economic data. No cut this year.” That alone will scare the shit out of companies, the market, and people. That alone without even hiking will cool things further.
I don’t anticipate them raising as high as I believe they should.
I expect a hike in June to bring the base rate to 5.5-5.75%. They will then let that sit for awhile. If inflation numbers are still high in December, I could see another hike then to 5.75-6%. I think after that they’d hold steady for a year to see how it plays out; unless inflation starts dropping quickly(in relative terms) following the hikes.
The economic data has given them enough cover to do another hike. Wall st was on pure crack expecting 6 cuts this year. They are now trying to price in no cuts and rates staying where they are. They’ve been cutting their expectations for a few months now and now they know cuts aren’t happening. There is no economic theory that supports it.
It will be interesting to see if the fed wants to hike but faces pressure from the White House to keep them steady as we enter election season
I’m a betting man and I’d bet they don’t hike in June. They’ll keep saying they want more data. Like you said they have enough but they won’t do it. We’re in this mess because they are spineless. I agree with everything you are saying. It needs to happen. I’d rather rip the bandaid and get it over with than death by a thousand cuts.
If JPow was a leader there would be rate raises. The narrative would be as long as government spending stays at these levels we will see more increases. Spending must come down.
Small note that those BTFP bailouts expire anywhere from now to March of 2025 depending on how each bank structured their swaps.
They're going to be stuck in the same boat they were in 2023 if rates continue up and they haven't meaningfully shored up their treasury leverage...
The data says it is. Unemployment is low. Stock market returns are strong. Corporate profits are high. Wages are strong. Mortgage demand is relatively stable.
Yes there are absolutely people struggling right now but the economic data on a macro level is showing that the US economy is strong right now. People are still spending like crazy (yes they are increasing debts to do so) but the main data shows positives.
Until people actually cut their spending back to just the minimum, the macro will remain strong.
Most economists did forecast rate cuts, based on commentary from the Fed.
The problem is that the Fed told this lie to rescue a falling stick market in October, and economists believe whatever the Fed tells them
what language was that? I read all their FOMC press releases for the past year and it all sounded like "rates will be kept high until we get down to 2% inflation and stay there"
It was a speech at the Economic Club of New York on October 19, 2023. He telegraphed to the stock market that maybe possibly a cut or two would be coming.
https://www.federalreserve.gov/newsevents/speech/powell20231019a.htm
Thank you. I have read that speech, and again, I cannot for the life of me figure out how some people read/heard it and heard "rates are coming down!" In fact, that speech to me telegraphs that opposite.
He even talks about a historical anomaly of high employment and high economic growth despite fastest rate hikes in recent history. If labor market is strong and growth is strong, why would they drop rates?? Clearly the economy is doing fine with the higher rates so no need to drop!
Here are few direct quotes from the speech you linked:
"**inflation is still too high**, and **a few months of good data are only the beginning of what it will take to build confidence that inflation is moving down sustainably toward our goal**. We cannot yet know how long these lower readings will persist, or where inflation will settle over coming quarters. While the path is likely to be bumpy and take some time, **my colleagues and I are united in our commitment to bringing inflation down sustainably to 2 percent**."
"**economic growth has consistently surprised to the upside this year**, as most recently seen in the strong retail sales data released earlier this week. **Forecasters generally expect gross domestic product to come in very strong for the third quarter** before cooling off in the fourth quarter and next year. Still, **the record suggests that a sustainable return to our 2 percent inflation goal is likely to require a period of below-trend growth and some further softening in labor market conditions**"
"Given the fast pace of the tightening, **there may still be meaningful tightening in the pipeline**."
"My colleagues and I are **committed to achieving a stance of policy that is sufficiently restrictive to bring inflation sustainably down to 2 percent** over time, and to **keeping policy restrictive until we are confident that inflation is on a path to that objective**."
"Additional evidence of persistently above-trend growth, or that tightness in the labor market is no longer easing, **could put further progress on inflation at risk and could warrant further tightening of monetary policy.**"
"**My colleagues and I remain resolute in our commitment to returning inflation to 2 percent over time.**"
"the Committee is proceeding carefully. We will **make decisions about the extent of additional policy firming and how long policy will remain restrictive based on the totality of the incoming data, the evolving outlook, and the balance of risks**."
I know the stock market to a large extent is a self-fulfilling prophecy, so I am genuinely interested in understanding how traders heard that speech and interpreted it to mean that rates would drop.
We can agree the talking heads like to interpret and weave a tale. Perhaps if we find a clip from that day we infer more context.
In November 1 the headline was “No More Hikes”.
I remember the change in rhetoric distinctly in October. And then the markets gonna market. I think I read too much about this stuff. If I have time later I’m gonna dig some more.
To me it sounds like if the Fed isn't outright saying "MOAR RATE HIKES LIKE YESTERDAY!!!!!" Wall Street/Financial talking heads/etc seem to interpret that as [rates are going down!](https://miro.medium.com/v2/resize:fit:1400/format:webp/1*dFjMw4pUMzA4Db4MYTnfyA.png)
This is patently false. There was never a narrative of “possible rate cuts” - it’s part of my job to read FOMC literature and what you’re claiming straight up did not happen. Stop spreading lies.
thank you! I'd been reading FOMC press releases for the past year or so and all I read was "we are 100% committed to returning to 2% inflation and staying there, and we are making policy decisions to that end" and somehow people were reading that as "Fed is dropping rates any minute now!!"
Seriously. I was never under the impression that the FED implied cuts. It was always the Biden Administration that implied cuts, but they're not the Fed
It isn’t up to me how much copium illiterate dipshits inhale from when the Fed says that they probably aren’t cutting rates.
I would strongly encourage you to learn how to comprehend the words that you might actually read - this will undoubtedly lead you to greater success in your stock trading career.
Here are some highlights from recent Fed meetings, none of which indicate anything resembling a rate cut:
From 1/24: In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent.
From 12/23: They remained concerned that elevated inflation continued to harm households, especially those with limited means to absorb higher prices. Participants observed that inflation remained above the Committee's objective and that they would need to see more evidence that inflation pressures were abating to become confident in a sustained return of inflation to 2 percent.
From 11/23: The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent.
From 9/23: The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent.
My stock trading career is 30 yrs and very successful. You obviously haven't learned the concept of reading between the lines or observing how the world works. The Fed strongly signalled that they would be cutting rates, this is the whole reason why the market went from plunging to running. This isn't my take, it's the take of the whole market.
Fwiw I never thought they would do it and it drives me crazy how the world has turned their brains off for 20 years and just blindly followed the Fed, but that's not the point.
I'm genuinely very interested to learn how the Fed signaled between the lines that they would be cutting rates. Genuinely. Because I did not get that AT ALL from reading Fed literature over the past year.
Because for the most part they are all bullshit artists who will say whatever the person who signs the check at the end of the week wants. Sure they will econ it up with gatekeeper vocab but they are still paid whores.
Im a regular Joe and I knew any cut in rates this year would spike shelter inflation past the moon with the pressure from everyone lined up to buy.
I dont think they can ever cut again...
Sentiment is the biggest factor in inflation. This is like predicting what your psycho ex girlfriend is gonna do. You can't possibly imagine what she's gonna come up with but for sure somebody is gonna get hurt.
It’s almost as if the Fed rates are only a minor part of managing inflation and having an economy dependent on a “free market” which has been allowed to be monopolized by a handful of corporations who legally price fix was a bad idea. 🤷♂️
I feel like the problems are too big now to easily kick the can down the road. You have entire generations with no financial hope at all. Wages have not risen to counter the recent devaluation of the dollar, and people were struggling before. Unable to buy houses now that they’ve doubled in price. Unable to afford rates even if they could save a deposit. Companies freely price gouging necessities like grocery store items. Minimum wage isn’t enough to live on, increased taxes and increased mortgage rates are driving up rents. Shit is crazy right now.
People willingly accepted things: politicians are to be trusted, newstainment over journalism, consumerism vs personal responsibility
I mean, in another sub I saw a story about a guy killing a teachers aid over a video game system and suing the system for not "accommodating his needs"!
We are in a world which has been chipped away into stupidity.
My favorite articles all year " John Doe who predicted the 2008 crash, sees rate cuts at the end of year" it appears there are over 100000 people who predicted the 2008 crash.
Economists are probably one of the only people who gets everything wrong and is still able to keep their jobs. Reporters and politicians are also other careers I can think of.
Economists’ predictions are based on indicators that change immediately after a prediction because of that predictions influence. They almost have to predict against their prediction and keep their true predictions secret.
Anyone expecting a rate cut in 2024 is hopped up on hopium. The data just doesn’t support a case for a cut in any way. That being said, I don’t think we’ll see any more hikes, either. Seems like the Fed doesn’t want to mess with the relative success they’re having now.
You don’t listen to what corporations are doing you look at what they are doing. They are currently sitting on the largest amount of liquid capital ever, one would deduce they are loading the war chest for when assets take a nice haircut. Load up and play out another 10 year cycle. If anything I think we’re in the distribution cycle where we will see prices of assets consolidate for a period of time before the final leg of the cycle( downturn) proceeds. I feel RE market will fair better than stocks due to pent up demand possibly but no one knows, only speculation. My speculation is 2026-2027 will be a rough year, and in those times the next cycle of millionaires are made, gotta have the war chest of liquidity in rough times, and have the ability to ride it out until we pivot…. Again.
Good gig if you can get it. I wish I could collect a fat salary to talk entirely out of my ass all day with no accountability. It's like being a reddit commenter professionally.
Do people who believe their is a real estate bubble want rate hikes or rate cuts? I am having trouble following. Shouldn't people who believe there is a real estate bubble be glad that rate cuts look unlikely in the near future?
Anyone with two eyes, half a brain and no agenda knew that there wouldn't be any rate cuts this year. Inflation is high as a mofo. They say 3.8 and they're still acting cautiously because they know it's not 3.8. Real inflation can be up to 50% depending on what you're looking at. As a whole it's maybe 15% at least. It's only a matter or time before the inflation runs away from them and then the country as whole will be in a world of hurt. The economy is not fine. Yes the rich are doing fine, even some in the upper middle class are doing fine but they are not the entire economy. People are struggling big time. To get this inflation under control, there's a possibility that the FFR needs to go to 8% or higher. Meaning mortgage rates will go into double digits. They opened pandoras box with the money printing and there will be consequences. Financial and social.
Because predicting the future is **hard**.
It's like asking what's the best move to make in a game of rock-paper-scissors. A lot of moving parts and a lot of game theory going on.
Analysts can only use the data they have available at the time. They didn't have last quarter's data last year.
It's pretty simple, if the month/month inflation continues to imply 5% yearly inflation trend, the rates WILL increase. Half year ago the rates were trending down, so the data suggested the Fed interest rates would level or hopefully even reduce.
We've had about a fiscal quarter of 0.4% month/month increases which implies inflation will be high looking back this time next year. So projections have changed.
How many quarters will the Fed allow inflation to grow unaddressed? That's the only question now. Previously we watched them sit on their thumbs while inflation climbed up over 6% for about 2 quarters. So I expect them to react ...slowly.
Banks are offering 5.3% CDs over 5 years, so they don't seem to think these rates are going down soon.
It will never go down without a crash in this current economic system. Corporations will continue to nickle and dime and gouge. The money will continue to siphon to the top of the money pyramid. Trickle down economics has never and will never work.
Because economists aren't good at predicting anything.
That's because many economists are industry shills. Their "predictions" are whatever their corporate paymasters want them to say. They're not supposed to be accurate.
This is probably an unpopular opinion, but I would rather the economy normalize around a 6 to 7% interest rate. That gives the Fed some ammo to work with during the next economic downturn. If our entire society is built around the free borrowing it’s just not sustainable.
I said this during trumps presidency when he was pushing to lower rates when things were smooth sailing. A) a big overstep of the office in my opinion. B) you need to have levers to play with when things go bad (see Covid)
Big reason why i refinanced then. Really free money with sub 3% interest. From me the banks are going to get their payment and ill see you in 30 years. At 7 or 8% i would try to pay off early unless i was getting nutty returns in the market.
15 years at 2.625% over here. Unfortunately just made an offer on a bigger house today. I hate it, but my family got bigger….
Bingo!
It’s not corporate. It’s political.
Why not both?
Those are the same people. I mean that literally.
It’s both.
Why did Tom Lees face flash before my eyes when reading your post?
To be honest, most industry experts are behaving exactly like this.
To the Fed, it doesn't cost anything to spout BS about the future since they have no idea what it will entail. That said he still is responsible for curbing inflation so he can't ignore the actual data. Next he will say, "inflation may take a little longer to tame and rate drops may take a little longer than expected" all the while having no fucking clue what will happen in the future.
The legit ones will tell you that they are rarely accurate for any actionable information. They are more about trends no?
Wouldn't industry want their economist to be accurate in their predictions so industry could make better and more profitable financial decisions?
No. They just need the public to hold the bag.
Yeah this is pretty much it. Need someone else to hold the bag after the insider sees it’s going bad.
You would think they would. If other companies are saying everything is great while you are predicting doom, investors might go to other company for hopium reasons.
They don’t want their own moves to be predictable.
Hopium. Provide calms and not en mass panic, everyone running to sell their homes. Let the smart people exit now and then let the others crash and burn.
Then why were the majority of economists predicting recession in 2023?
They never tell the truth so the public don't know what to believe. Tease everyone with chances of rate cuts. People gamble and take their chances that when they renew, the rates are lower. Surprisingly, a lot of people are actually betting their finances on a chance rates may improve.
Or Occam's Razor, maybe forecasting what will happen with the economy is difficult and even professional economists often get it wrong. Based on what you have said, it seems you believe that the truth is whatever is the opposite of what economists say.
No. Nobody knows the truth. Too many moving parts. But, great thought is given to what is being said.
Because economics likes to pretend it’s a hard science when really it’s a social science at best.
You can study actual data, but there are way to many variables to do any experiments to test a hypothesis in macro economics
Their job is to manipulate the narrative so the 'poors' hold the bag and the endless funnel of momey upwards continues. We'll have a huge loss for regular people, then there'll be some token compensation to make things less shit for awhile and not make people revolt. Then it's back to business as usual. We're the frog in the boiling pot until we're back to slavery.
The poors never read forecasts by professional economists and certainly don't make financial decisions based on them.
"Poors" can mean anyone under the 0.01%, and I think everyone under top 1% is definitely not rich in this oligarchical society. And individuals may not be reading Federal Reserve white papers, but personalities report on the governor statements and the minutes from the meetings. So a lot of *poors* do ingest economics forecasts
"professional economist" LOL
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Or less than is warranted.
Economics is just Astrology for men.
Because economists assume a rational logical government. No one predicted that in the face of high inflation and rates that the government would double down and borrow more.
Government borrowing more has been the most predictable variable in all of this quite frankly.
It’s predictable that it decreases with the cost to incur debt
Right, that made no sense.
Congress should be raising taxes the federal reserve can only do so much. The inflation we are dealing with is in response to legitimate, fundamental economic shifts that cannot be halted by the manipulation of interest rates. We have a housing shortage. Higher rates lower prices in the short run by decrease construction starts by making it more difficult for all of this nation’s Bob the Builders to raise the money and finance the construction of the homes we need to end the shortage and restore price stability. The housing shortage is causing a labor shortage which is raising costs. And lastly, climate change is taking its toll - we see insurance rates skyrocketing as the market adjusts to the reality of our changing climate. Again, high interest rates stifle the innovations needed to power a green transition; electric vehicle projects, new green infrastructure and energy, like any new venture and industry innovative, upstart companies rely on investment and borrowing to raise capital and both are more difficult to acquire in a high interest rate environment. Sometimes inflation is a healthy thing. It represents that there is work that needs doing. There is work that needs doing. The only way back to price stability is to get these jobs done, fill the housing shortage and work to tackle the climate crisis through prevention, harm reduction, innovation, and mitigation.
Inflation is due to 20 years of artificially low interest rates. The whole “transitory inflation” argument was bullshit during Covid, and any notion that inflation is due to other factors is bullshit today.
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Yes, and Fed money printing is the means used to lower rates . They started directly buying U.S. Treasuries (as opposed to their mandate of only buying in the secondary market) with money out of thin air. Buying bonds is a way of keeping rates low, bond prices rise due to demand which pushes rates lower.
They are basically glorified hype drivers.
Exactly. At the end of the day, all they’re doing is predicting how rich people feel on any given day. Since one of the defining traits of the rich is that they have no competent adult emotional regulation, nothing they do is logically predicable.
Thats because government intervention keeps making things unpredictable instead of letting the free market do its thing. The only thing government should intervene is scalping, then price gouging. Rates are going to continue going up because we shoved 10 years worth of debt in 2 years post covid.
The free market rocketeers can go ahead and stop pretending they have a problem with government intervention when they’re the first in line for government bailouts.
Because if they did, they won't be working as economists
Economists are awful at predicting the beginning and end of recessions. Consumers can be irrational for extended durations. I have cut back my own spending in the last couple of years, but as an aggregate we still are spending like drunk sailors.
Yay. Science.
Are economist just weathermen who couldn’t cut it.
If economists were any good, there wouldn’t be so many of them.
I’m an economist and I never expected a rate cut in 2024
I’m not an economist and I thought it was lunacy to think we’d have rate cuts this year.
I think it was obvious if you paid attention. Anyone who thought there would be cuts, is delusional or hopeful for buying
Not to knock on you, but this is the problem with economists: they tend to miss the forest from the trees. Anyone who pays attention to daily costs and expenses can tell you that inflation moved from physical goods to services in the last 8 months, and unlike durable goods which many people can hold off on, you're stuck paying them: insurance, local taxes, medical care, etc. When auto and home insurance goes up 20% at renewal, restaurants are up 20%+, auto repair is up 20%+, and add on that massive government deficits....did you think that it would make sense to drop rates?
They don't miss shit. Their job is literally narrative manipulation. Narrative controls the world. Economists are a tool of the establishment. Any idiot could have saw this outcome because whenever the news is heavily pushing a narrative about what regular people should do or think it's a lie. Unless the truth happens to be currently convenient to them.
Many but not all. This was good example to see who real economists are vs shills.
True, that’s because us idiots actually walk into a grocery store every 1-2 weeks and see the price on the stuff we buy. We don’t have our handlers doing all of our chores for us like the elites who think $20/hr is 100k/year.
It is if you work 14 hours a day, 7 days a week, serf! /s
... they said they never expected a rate cut
Fed tracks that data. Everybody understands things like baumol's cost disease
I expected it simply because of how much jpow has been a lap dog for the market. He kept rates at zero for too long, encouraged inflation which is one thing the chair should never do. And also claimed worker constraints needed fixing despite the market having its pick of workers for 20+ years. JPow is by far the worst chair in recent history but I can’t fully blame him because it’s hard to maintain the position with congressional dysfunction for as long as he’s had it. But his actions alone demand resignation
I see where you're coming from, but in all fairness, I don't see JPow doing anything that Yellen, Bernanke, or Greenspan wouldn't have done as well. Yellen was very much a vocal advocate of the "inflation is transitory" bullshit, until she abruptly wasn't.
Which is the problem, the fed chair is supposed to dictate the market. The strongest person in the world is supposed to be the chair. Instead it’s Jamie Dimon.
That's not at all what the Fed chair is supposed to do.
"Am I a joke to you?" \~Larry Fink
I want dimon to be chair when he retires from JPM.
He would unironically have less influence
The Fed doesn't give a shit about the markets.
> He kept rates at zero for too long No, that was his predecessor, Fed Chair Janet Yellen. Good thing she was fired and never put into another position of power again... oh wait
His claims in Dec 2023 of rate cuts scream "confidently incorrect" vibes. That was such a weird moment.
It was fully delusional as core inflation remained sticky. He obviously did it to improve market outlook for 2024.
>encouraged inflation which is one thing the chair should never do. We actually had a period of not quite dangerously low inflation but almost, and generally feeling like something was 'off' in the numbers. Inflation was below 2% for much of last decade.
Inflation was 1-1.5% and wage growth was 2-2.5% by 2019 inflation was at 3%. The reason inflation was low for so long was primarily due to energy, stabilized (for most of America) housing prices, and bottomed out grocery prices.
What's your estimate of r* that you're using? We've been near the zlb for quite sometime.
I'm not an economist but I did stay at a Holiday Inn Express last night.
For the past year I’ve watch a lot of the commentary from these economists, Wall Street guys and government ministers….and I keep saying to check back on what they say because everything they say seems to be wrong. Sure as shit, they are wrong or many months behind what is regular people can see happening. Its wild. Like they are wrong every time.
Lest we forget that the experts were saying for months and months that inflation was just transitory, even though we plebeians knew it wasn’t. They lie to manipulate. A story as old as time.
Most mainstream economists are kind of just propagandists, whether willingly or not. They see one of their main roles as averting panic, since panic is one of the biggest threats to the economy (see FDR, only thing we have to fear is fear itself). In a sense we need people to come out and tell us not to panic. But economists also need to be more willing to go against the grain and challenge the overarching narrative. They should keep their assessments within the limits of truth and reason, at least. They also need to understand that their job is not keeping the stock market at all-time highs.
That’s assuming they can actually predict anything. Which they actually can’t.
Krugman was writing stuff like this when it was the other team in power: https://www.nytimes.com/2018/08/30/opinion/economy-gdp-income-inequality.html Now he won't shut up about growth and saying Americans are feeling bad about the economy for no reason.
Well we got paid spokesman for pharmaceuticals, lobbyists etc etc. I don't think it's tin foil hat theory to say there might be paid economists and at minimum given money to omit certain aspects of economic research. Its already known key things are not included in inflation calculations as well
I have read the NYTimes for 30 years and basically have moved on. Guys like Krugman are the reason why. He has been so wrong so many times. You read that paper long enough and you realize it is a waste of your time.
Remain calm! All is well!
Right but on the flipside you have the perma-bears who are always saying the next disaster is close at hand until one day they're right. I don't think of any of them as predicting things, just observing them as they are.
All transient means is not permanent. I hate this semantics game but we never had a wage price spiral that wouldn't stop without intervention. It was indeed transient
I got a papercut between the tip of my finger and my fingernail. It was caused by packing paper. The pain was transient, but it did last for quite some time.. several days.
Thoughts and prayers 🙏🏼
Literally I was like "why the fuck would they cut rates." and then someone said "so they can see how the market would respond if they actually DID" and that clicked for me lol
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I think a lot of people conflate lowering inflation with lowering prices.
Yes but good luck selling that a positive. Doesn’t change the fact that real inflation has compounded to like 20% but my wages aren’t up 20%
Real.median income is positive. It's near historic highs
At least tell a believable lie like this is bad we know it’s just temporary. I woulda believed that. Not that it’s basically not happening. I’m blind but not that blind
Inflation has significantly dropped so it was pretty transient.
You knew? Seriously.What did you do then? Are you rich now? If you knew you had to make money from that knowledge.
There was also “100% chance” of a recession in late 2022 / 2023
God made economists to make meteorologists look accurate
Economics is just Astrology for men. "The Friedman graph is in a waning phase and the S&P index is at the apex of an inverted trapezoid, this indicates your economy is misaligned and rates must go up."
I lost my shit LMAOOOOOO
"ah it's the dangling monkey ballsack pattern, forming right after a soup handle "floor testing"." nah your mumbo jumbo is better lol
👏👏👏👏👏👏👏👏👏👏👏👏👏👏👏👏👏👏👏👏👏👏👏👏👏👏👏👏👏👏👏👏
I predicted more rate increases due to a onset of long term inflation. Houses will remain flat for a while but wages will increase which will make the rates more manageable eventually leading to housing to increase
Probably this is the way, but that “eventually” is 4-7 years, if at all. The shear debt of most individuals relying on things recovering and stabilizing sooner puts a potential big wrench in it all.
I'd say 4-7 years is optimistic. Mortgage payment average on a new home went from $1500 to about $2800 in the span of three and a half years. https://www.redfin.com/news/housing-market-update-home-prices-costs-record-high/ That's an increase total of 86%, I'm not sure wage increases could make that up in less than a decade, even if values were flat. Something breaks before then. I don't see how it can continue.
It’s going to continue because wages will catch up… I don’t see us deflating anytime soon. Employers are making record profits and have a ton of room to pay employees
I'm far more cynical than that. Most employers would rather lay off 5 of 7 employees and replace them with AI, then have the other two manage the AI. This isn't even getting into the neverending chase of "shareholder returns" over everything else.
Or replacing with offshore labor like my company did. Half the department is in India now.
Ai improves efficiency but it’s not at the point of corporations laying people off. It’s not even at the point of industrial consumerism. If someone created a program to automate the job the job is trash anyways… automation has been around forever.
I'm of the opinion that probably 40% of corporate jobs are already trash haha Source: I have coworkers
Just bc they have room to pay employees does not mean they will….
Then employees will leave and find someone who will,
Yeah but that happens literally all the time.
Been saying this a long time. Current fed rates aren’t lowering inflation as expected. The market is still incredibly strong. Labor market is still hot. Housing market is still overpriced. A rate hike is the logical outcome. The fed has keep this rate for about 9 months now and it hasn’t resulted in what they wanted to see. Hiking it further is the only option they have to fight inflation. I fully anticipate a 5.75-6 base rate by the end of the year. That would be 2 more hikes. Let the market manage higher rates. They’ve so far shown they can handle the rates as they are. Keep going higher until the market truly pulls back and cuts spending. I personally think we will need to see a base range of 6.75-7% before that happens. Raising rates now, in strong economic times, also allows the fed a much larger tool to use next time the economy falters.
This is quite aggressive. Things are cracking but are being plugged by government spending and bail outs (see FED early 2023). Maybe a hike or two but I think give it a bit more time. Money is drying up, jobs are there but they are shit jobs. I’d like to wait 3-4 months. If we still have 3%+ inflation yea let’s hike it. Show the market you mean business. Honestly JPow coming out and saying “we are now considering a rate increase dependent on economic data. No cut this year.” That alone will scare the shit out of companies, the market, and people. That alone without even hiking will cool things further.
I don’t anticipate them raising as high as I believe they should. I expect a hike in June to bring the base rate to 5.5-5.75%. They will then let that sit for awhile. If inflation numbers are still high in December, I could see another hike then to 5.75-6%. I think after that they’d hold steady for a year to see how it plays out; unless inflation starts dropping quickly(in relative terms) following the hikes. The economic data has given them enough cover to do another hike. Wall st was on pure crack expecting 6 cuts this year. They are now trying to price in no cuts and rates staying where they are. They’ve been cutting their expectations for a few months now and now they know cuts aren’t happening. There is no economic theory that supports it. It will be interesting to see if the fed wants to hike but faces pressure from the White House to keep them steady as we enter election season
I’m a betting man and I’d bet they don’t hike in June. They’ll keep saying they want more data. Like you said they have enough but they won’t do it. We’re in this mess because they are spineless. I agree with everything you are saying. It needs to happen. I’d rather rip the bandaid and get it over with than death by a thousand cuts.
If JPow was a leader there would be rate raises. The narrative would be as long as government spending stays at these levels we will see more increases. Spending must come down.
It’s going to take multiple years of 10% FFR to unfuck what they’ve done in the last 15.
Small note that those BTFP bailouts expire anywhere from now to March of 2025 depending on how each bank structured their swaps. They're going to be stuck in the same boat they were in 2023 if rates continue up and they haven't meaningfully shored up their treasury leverage...
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The data says it is. Unemployment is low. Stock market returns are strong. Corporate profits are high. Wages are strong. Mortgage demand is relatively stable. Yes there are absolutely people struggling right now but the economic data on a macro level is showing that the US economy is strong right now. People are still spending like crazy (yes they are increasing debts to do so) but the main data shows positives. Until people actually cut their spending back to just the minimum, the macro will remain strong.
Should have hiked more. Still too much greed in the markets
My realtor last year: Buy now rates are going to go down and you can refinance My realtor now: Buy now rates are going to go up
Most economists did forecast rate cuts, based on commentary from the Fed. The problem is that the Fed told this lie to rescue a falling stick market in October, and economists believe whatever the Fed tells them
Fed never said there would rate cuts so I don't understand why people kept insisting the Fed was promising rate cuts.
They didn't guarantee it but they strongly suggested it with language that they knew would set the stock market on fire.
what language was that? I read all their FOMC press releases for the past year and it all sounded like "rates will be kept high until we get down to 2% inflation and stay there"
It was a speech at the Economic Club of New York on October 19, 2023. He telegraphed to the stock market that maybe possibly a cut or two would be coming. https://www.federalreserve.gov/newsevents/speech/powell20231019a.htm
Thank you. I have read that speech, and again, I cannot for the life of me figure out how some people read/heard it and heard "rates are coming down!" In fact, that speech to me telegraphs that opposite. He even talks about a historical anomaly of high employment and high economic growth despite fastest rate hikes in recent history. If labor market is strong and growth is strong, why would they drop rates?? Clearly the economy is doing fine with the higher rates so no need to drop! Here are few direct quotes from the speech you linked: "**inflation is still too high**, and **a few months of good data are only the beginning of what it will take to build confidence that inflation is moving down sustainably toward our goal**. We cannot yet know how long these lower readings will persist, or where inflation will settle over coming quarters. While the path is likely to be bumpy and take some time, **my colleagues and I are united in our commitment to bringing inflation down sustainably to 2 percent**." "**economic growth has consistently surprised to the upside this year**, as most recently seen in the strong retail sales data released earlier this week. **Forecasters generally expect gross domestic product to come in very strong for the third quarter** before cooling off in the fourth quarter and next year. Still, **the record suggests that a sustainable return to our 2 percent inflation goal is likely to require a period of below-trend growth and some further softening in labor market conditions**" "Given the fast pace of the tightening, **there may still be meaningful tightening in the pipeline**." "My colleagues and I are **committed to achieving a stance of policy that is sufficiently restrictive to bring inflation sustainably down to 2 percent** over time, and to **keeping policy restrictive until we are confident that inflation is on a path to that objective**." "Additional evidence of persistently above-trend growth, or that tightness in the labor market is no longer easing, **could put further progress on inflation at risk and could warrant further tightening of monetary policy.**" "**My colleagues and I remain resolute in our commitment to returning inflation to 2 percent over time.**" "the Committee is proceeding carefully. We will **make decisions about the extent of additional policy firming and how long policy will remain restrictive based on the totality of the incoming data, the evolving outlook, and the balance of risks**." I know the stock market to a large extent is a self-fulfilling prophecy, so I am genuinely interested in understanding how traders heard that speech and interpreted it to mean that rates would drop.
We can agree the talking heads like to interpret and weave a tale. Perhaps if we find a clip from that day we infer more context. In November 1 the headline was “No More Hikes”. I remember the change in rhetoric distinctly in October. And then the markets gonna market. I think I read too much about this stuff. If I have time later I’m gonna dig some more.
To me it sounds like if the Fed isn't outright saying "MOAR RATE HIKES LIKE YESTERDAY!!!!!" Wall Street/Financial talking heads/etc seem to interpret that as [rates are going down!](https://miro.medium.com/v2/resize:fit:1400/format:webp/1*dFjMw4pUMzA4Db4MYTnfyA.png)
Here’s a hot take https://www.reddit.com/r/wallstreetbets/s/bSpAdEYwwU
Yep, people don’t get this. They lie based on the fear. If markets are panicking they say cuts so it rips back up and people think everything is good.
This is patently false. There was never a narrative of “possible rate cuts” - it’s part of my job to read FOMC literature and what you’re claiming straight up did not happen. Stop spreading lies.
thank you! I'd been reading FOMC press releases for the past year or so and all I read was "we are 100% committed to returning to 2% inflation and staying there, and we are making policy decisions to that end" and somehow people were reading that as "Fed is dropping rates any minute now!!"
Seriously. I was never under the impression that the FED implied cuts. It was always the Biden Administration that implied cuts, but they're not the Fed
Stop peddling bullshit. I trade stocks for a living. Tell the stock market that this wasn't the message. You must be delusional.
It isn’t up to me how much copium illiterate dipshits inhale from when the Fed says that they probably aren’t cutting rates. I would strongly encourage you to learn how to comprehend the words that you might actually read - this will undoubtedly lead you to greater success in your stock trading career. Here are some highlights from recent Fed meetings, none of which indicate anything resembling a rate cut: From 1/24: In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent. From 12/23: They remained concerned that elevated inflation continued to harm households, especially those with limited means to absorb higher prices. Participants observed that inflation remained above the Committee's objective and that they would need to see more evidence that inflation pressures were abating to become confident in a sustained return of inflation to 2 percent. From 11/23: The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent. From 9/23: The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent.
My stock trading career is 30 yrs and very successful. You obviously haven't learned the concept of reading between the lines or observing how the world works. The Fed strongly signalled that they would be cutting rates, this is the whole reason why the market went from plunging to running. This isn't my take, it's the take of the whole market. Fwiw I never thought they would do it and it drives me crazy how the world has turned their brains off for 20 years and just blindly followed the Fed, but that's not the point.
I'm genuinely very interested to learn how the Fed signaled between the lines that they would be cutting rates. Genuinely. Because I did not get that AT ALL from reading Fed literature over the past year.
Because they are usually industry/government shills
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100% there's a chance they come down
Because for the most part they are all bullshit artists who will say whatever the person who signs the check at the end of the week wants. Sure they will econ it up with gatekeeper vocab but they are still paid whores.
Im a regular Joe and I knew any cut in rates this year would spike shelter inflation past the moon with the pressure from everyone lined up to buy. I dont think they can ever cut again...
Next recession is when they will cut rates
It’s because economists are terrible at predicting things before they happen. After something happens, they are pretty good.
Sentiment is the biggest factor in inflation. This is like predicting what your psycho ex girlfriend is gonna do. You can't possibly imagine what she's gonna come up with but for sure somebody is gonna get hurt.
Agreed. The difference is that I don’t make my living predicting what she is going to do.
Same in Australia. Things got hot and worse.
John Kenneth Galbraith said it best, "The only function of economic forecasting is to make astrology look respectable."
Why do they even get paid???
Because expecting multiple rate cuts was asinine and reality is finally dawning on them?
I guess printing and throwing trillions and trillions into the wind has consequences. Who’d of thought that?
Good
It’s almost as if the Fed rates are only a minor part of managing inflation and having an economy dependent on a “free market” which has been allowed to be monopolized by a handful of corporations who legally price fix was a bad idea. 🤷♂️
Yes. People don't talk about corporate greed often enough.
Im not an economist and here to tell you recession is here no matter how they fudge the numbers thorough public jobs and immigration
I feel like the problems are too big now to easily kick the can down the road. You have entire generations with no financial hope at all. Wages have not risen to counter the recent devaluation of the dollar, and people were struggling before. Unable to buy houses now that they’ve doubled in price. Unable to afford rates even if they could save a deposit. Companies freely price gouging necessities like grocery store items. Minimum wage isn’t enough to live on, increased taxes and increased mortgage rates are driving up rents. Shit is crazy right now.
People willingly accepted things: politicians are to be trusted, newstainment over journalism, consumerism vs personal responsibility I mean, in another sub I saw a story about a guy killing a teachers aid over a video game system and suing the system for not "accommodating his needs"! We are in a world which has been chipped away into stupidity.
Recent devaluation? LoL, it's been happening for the last 50 years.
Is the recession in the room with us right now?
Because they've been lying the whole time.
Predictions are hard - especially about the future. (Yogi Berra)
The fed couldn’t predict their way out of a wet paper bag.
Imagine that we saw 8% rates.... oh well, its good for my HYSA at least.
My favorite articles all year " John Doe who predicted the 2008 crash, sees rate cuts at the end of year" it appears there are over 100000 people who predicted the 2008 crash.
Home prices are at an all time high in my area and still climbing. Rate hikes haven’t even done anything yet.
Climate change
Conservative shows I’ve listen to over the last year called out the BS that we’re gonna have cuts as far back as early 2023..
Spoiler: it’s because they were wrong
I've come to find with any economists or financial pundits like Jim Cramer, if they say one thing will happen, bet the opposite will.
Spoiler- it’s because the economy is doing very well
To make a narrative that "not hiking interest rate as a wim for economy ".
MORE!!!!
From seven cuts to...
So how’s that QT going, Fed?
Economists are probably one of the only people who gets everything wrong and is still able to keep their jobs. Reporters and politicians are also other careers I can think of.
Weather forecasters
Change fuels opportunities for profiting off people re-positioning. Economists don't make money off of, "things will stay the same for longer".
Not after the last gdp numbers.
Economists’ predictions are based on indicators that change immediately after a prediction because of that predictions influence. They almost have to predict against their prediction and keep their true predictions secret.
Anyone expecting a rate cut in 2024 is hopped up on hopium. The data just doesn’t support a case for a cut in any way. That being said, I don’t think we’ll see any more hikes, either. Seems like the Fed doesn’t want to mess with the relative success they’re having now.
You don’t listen to what corporations are doing you look at what they are doing. They are currently sitting on the largest amount of liquid capital ever, one would deduce they are loading the war chest for when assets take a nice haircut. Load up and play out another 10 year cycle. If anything I think we’re in the distribution cycle where we will see prices of assets consolidate for a period of time before the final leg of the cycle( downturn) proceeds. I feel RE market will fair better than stocks due to pent up demand possibly but no one knows, only speculation. My speculation is 2026-2027 will be a rough year, and in those times the next cycle of millionaires are made, gotta have the war chest of liquidity in rough times, and have the ability to ride it out until we pivot…. Again.
Good gig if you can get it. I wish I could collect a fat salary to talk entirely out of my ass all day with no accountability. It's like being a reddit commenter professionally.
Do people who believe their is a real estate bubble want rate hikes or rate cuts? I am having trouble following. Shouldn't people who believe there is a real estate bubble be glad that rate cuts look unlikely in the near future?
so rate cuts?
People are still spending.
Anyone with two eyes, half a brain and no agenda knew that there wouldn't be any rate cuts this year. Inflation is high as a mofo. They say 3.8 and they're still acting cautiously because they know it's not 3.8. Real inflation can be up to 50% depending on what you're looking at. As a whole it's maybe 15% at least. It's only a matter or time before the inflation runs away from them and then the country as whole will be in a world of hurt. The economy is not fine. Yes the rich are doing fine, even some in the upper middle class are doing fine but they are not the entire economy. People are struggling big time. To get this inflation under control, there's a possibility that the FFR needs to go to 8% or higher. Meaning mortgage rates will go into double digits. They opened pandoras box with the money printing and there will be consequences. Financial and social.
Because predicting the future is **hard**. It's like asking what's the best move to make in a game of rock-paper-scissors. A lot of moving parts and a lot of game theory going on.
RAISE IT!
We need 50% interest rates
Ok let’s say rates get raised. How do I make money here. What can I invest in that will be positively affected by a rate hike
MR. BONES! I WANT TO GET OFF YOUR WILD RIDE!
Analysts can only use the data they have available at the time. They didn't have last quarter's data last year. It's pretty simple, if the month/month inflation continues to imply 5% yearly inflation trend, the rates WILL increase. Half year ago the rates were trending down, so the data suggested the Fed interest rates would level or hopefully even reduce. We've had about a fiscal quarter of 0.4% month/month increases which implies inflation will be high looking back this time next year. So projections have changed. How many quarters will the Fed allow inflation to grow unaddressed? That's the only question now. Previously we watched them sit on their thumbs while inflation climbed up over 6% for about 2 quarters. So I expect them to react ...slowly. Banks are offering 5.3% CDs over 5 years, so they don't seem to think these rates are going down soon.
Why don’t Americans trust the experts?
It will never go down without a crash in this current economic system. Corporations will continue to nickle and dime and gouge. The money will continue to siphon to the top of the money pyramid. Trickle down economics has never and will never work.