Considering the interest rate for most of that time was basically zero it’s not hard to be an all-time high.
Bad news for those seeking to purchase/sell homes
Good news for rolling over cds
If you’re not getting 4% on your savings account, you should be switching banks.
That’s $40/year for every thousand you keep in the account, $200/year for $5000.
These sorts of comments are always kind of funny to me cause they strike me as somewhat out of touch. Nearly half of all Americans don’t have savings of more than $500.
It’s important to note here that just because a person may not have savings accounts over $500 doesn’t mean the person doesn’t have a 401k
Yeah I don’t think I get any interest on the $1000 that goes into my account one day and is gone the next for bills.
But they could if more of them put their money into CDs
They mostly don’t have any money left over to put into a CD…
What genres?
Eating our financial vegetables. Bout goddamn time.
It really goes to show how scared the Federal Reserve is of the current economic situation. They keep the interest rates high, essentially putting a damper on the economy because they think inflation could get so bad it’d be even worse.
Russian central bank is doing same thing in an attempt to control inflation. I believe they’re at 16% right now & 7~8% inflation.
I think the Ukrainian war is the cause of much of this. The Iranian situation of course threatens to raise inflation even further.
Biden’s in a tough position. It’s a very good thing the president can’t control the Federal Reserve. I would have dropped the rate if I were him.
Biden’s in a tough position. It’s a very good thing the president can’t control the Federal Reserve. I would have dropped the rate if I were him.
Remember how Trump was badgering the Fed to lower rates in 2019 (before the pandemic) because of his disastrous tax handout to the rich and trade war with China? I wish more people did.
The thing is a 5-6% interest rate isn’t really “high”, it’s on the low side of normal:
It’s only “high” in comparison to the irresponsibly low interest rate we’ve had since 2008. This isn’t “scared”, it’s hopefully a return to stable financial policy. The people who are complaining loudest about this are the financial parasites that have gotten used to getting free money from the government for so long.
I hope the fed keeps it like this for the next 20 years.
the financial parasites that have gotten used to getting free money from the government for so long.
Actually the government is giving out free money now as opposed to 0 interest rates where it wasn’t. The fed rate is the overnight rate you get for depositing money into the fed, not borrowing money from it. If I’m a bank and I have $1,000 at the end of the day and didn’t find anything to invest it in then I’ll deposit it at the fed and get say 5% apy as interest from the fed. If you did that every night for a year you’d get $50 from the fed while taking almost no risk, about as close to free as a capital gain can be called free. This has the effect of pushing up interest rates across the board because why would I invest in some risky business venture for 5% when I can get 5% with no risk from the government. The government is basically paying capital owners to not invest in riskier loans and bonds, cooling the market.
If you want to see financial parasites there are plenty of people right now with millions in Treasury bonds collecting even more interest from the government while doing nothing.
Don’t get me wrong their are plenty of parasites and con men that show up in the highly speculative world of 0% interest rates, *cough crypto *cough, but it’s not a matter of low interest rates good for capitalists and high interest rates bad.
And yet inflation is not calming down and has actually been going up again over the past few months. I wonder if the Federal Reserve will just give up on getting inflation back down to 2% and say okay our new target is 3%.
They will not. They reasserted that they’re getting to 2% at this meeting.
They don’t have to do anything but not cut for long enough and they’ll get to 2%, it’s just a matter of how much damage they do along the way.
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inflation is controlled by money being printed that doesn’t need to exist because it’s too much and there’s not enough goods and so therefore the interest rate makes a big difference.
That’s not how inflation works. Inflation is a measure of costs. That’s it. They track the costs of a whole bunch of products, put into baskets based on category, and measure the price change over time. That’s literally the definition of what inflation is measuring.
If gas price goes up and everything else stays the same, inflation rises. Same for cars, groceries, consumer electronics, rent, housing, and almost everything else. If the average goes up, that’s inflation. If the average goes down that’s deflation. (It’s more complicated than this, but it’s close enough.)
Money being printed can cause inflation, because more money in the system makes each dollar less valuable potentially. It isn’t the cause though. Banks can create money without printing any as well for that matter. If they loan out more of their percentage of holdings then that increases the money in the system, but the number of dollar bills stays the same.
Inflation is not based on the number of dollars. It’s based on how much a dollar can buy. Printing more can make them buy less, but also the cost of goods and services increases equally makes them buy less. This can be caused by an increased drive for profit, like the above comment says.
Inflation can also be caused by a lack of consumer confidence in the purchasing power of their currency. For example, Argentina and Venezuela, where people will come by at like noon during the workday to get the money from their working person to buy groceries with before it loses its value. You get people in a store whose only job is to walk by items and change prices as inflation ravages the money supply.
Yep. It’s purely a measure of (the change in) purchasing power. A lot of factors go into that, but printing money is not the only one, nor do I think it is usually a very large contributing factor, though I’m no expert. I don’t think the US is printing a particularly different amount of money currently than normal though, so it’s not really a factor here.
30% of all the dollars in existence were printed in 2020 and handed out as stimulus checks and foreign aid. Since then, we have had about a 30% inflation when you put everything together.
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Exactly, it’s how much damage they’ll do in the process. The Fed creates recessions and then booms with their monetary printing. Take the money printer away from them and you solve a lot of the problems. Because you adopt a sound money. Whether it be gold and silver or Monero. They all have limited supplies.
Spoken like someone who has loose understand of what they actually do.
Yeah, they balance inflation and unemployment. The idea of “sound money” is literal fools gold. We had currency backed by gold for thousands of years. There was a major recession every few years.
Every time some monarch coughed, there was a recession. If there was too much wheat, or not enough wheat: recession. The Federal Reserve has managed to save the economy during a literal world stopping pandemic. It’s part of the reason why people use the US Dollar as the reserve currency.
What were they supposed to do? At this point all it seems the fed is doing is aggressively demolishing the power of labour and arming the owner class with more financial control.
If anything, the fed should be increasing the rate even more.
