The Fed Must Repeal Its Disastrous Rate Increases

This guy makes some good points and it makes me wonder if the fed is sabotaging the economy on purpose.

"At a time of strong growth, wage gains, and record low unemployment, Fed policies have created one of the most dangerous deflation cycles in decades. Falling prices -- which we are seeing now in farm products, oil, silver, copper, iron, and so on -- can be as destructive to growth as inflation was in the 1970s. The job of the Fed is to keep prices stable, yet this year prices of all commodities are down 12 percent -- with most of that decline following the two disastrous rate increases, first in September and then another one a week before Christmas."
"By its action, the Fed threatens to crater the best economic performance in decades. The economy in 2018 is on pace to grow at more than 3 percent for the first time since 2005 and more than 50 percent faster than the average economic growth over the Obama years".

https://www.realclearpolitics.com/a...its_disastrous_rate_increases_139039.amp.html

 

Strong growth is actually a good reason to increase interest rates. Economists are projecting that a recession could happen by 2020. Historically, interest rates have been raised to about 5-6% in growth periods and we are only at 2.4% now. A higher interest rate when a recession hits means it can be drastically lowered to benefit the economy and help reverse the recession.

 

To a point I agree but purposely restricting growth to under 3% seems an over reach that threatens our still fragile booming economy. This economy just got going and reining it in too far too fast is dangerous to confidence levels that are necessary to keep the fire burning bright. Consumer confidence levels have dropped as rates have risen and this could spiral our economy down.

 

When you've been smoking crack for 100 years it's much easier to... just keep smoking crack. Stopping will hurt. A lot. For a long time.

Continuing use until death is the most comfortable option.

 

After 2005, the Fed raised interest rates to eventually 5.25%, under another GOP appointed chair. And that wasn't enough to prevent the great recession. Buckle your searbelts, there are higher rates to come.

 

We may not have a lot of time to raise interest rates, so its probably better to restrict growth to below 2% (2017 was 2.2%). When interest rates hit at least 4.5%, then we can slow the interest rate increase and allow growth up to 2.5%. When we hit 6% then we can allow growth to go anywhere. We really should have started increasing interest rates aggressively during Obama's second term.

 

Our growth period has been 100% fed dependent and it's been mostly asset price growth.

 

Yes, we have a historical evidence. Carter instituted AUSTERITY. The people HATED IT.

BUT, it ushered in a period of fat. And so, Reagan used that gain, to throw at the moon, to created HEAT. And so, all the gain that SHOULD have been attributed to CARTER, went instead to Reagan. And Trump, seeing how easily Reagan STOLE the Carter addaboys, did likewise. And is throwing money.

 

I agree that rates were left to low to long but I disagree that making up for lost time now is the proper course of action. I can't see the rational for slowing an economy that is just now getting it's legs under it and as I earlier said it's already effecting consumer confidence and the market with predictions of lower growth. The panic of 1873 was largely predicated by trying to control the economy with interest rates and we should learn from that mistake.

 

Wow talk about revisionist history!

 

Tell me how that is incorrect, and I will then spend the time to shove it home. I have the proof.

 

Only thing you were right about was austerity. Other than that I remember long gas lines, 2% GDP and 8% unemployment. I voted for the man and it was the last democrat I ever voted for. Much like Obama he tried to convince us less is more and I'll never forget his telling us to put on a sweater if we were cold because we couldn't afford to heat our homes. Did you live through this era or are you just going to manipulate statistics to back up your opion here.

 

So we should have given the banks AUSTERITY in 2008?

 

Economists predict a return to 2.2 GPD growth for 2019 with likely recession mid to end of 2019.

https://www.thebalance.com/us-economic-outlook-3305669


Goldman Sachs forecasts US economic slowdown in 2019
GDP growth expected to slow to less than 2%

http://www.atimes.com/article/goldman-sachs-forecasts-us-economic-slowdown-in-2019/

 

So why is the fed intent on raising rates so high do fast and it could be argued recession is forcast due to these rate hikes.

 

There is INCOMPETENCE creating crisis, and there is the NATURAL business cycle.

 

The economy didn’t just start going. It’s been on the same upward trend for 9 straight years.

 

Your boy, Trump, appointed the head of the Fed - the buck stops with Trump. Yellen took a much more cautious approach to rate increases, but she was a Trump appointee, so Baby-Trump had another temper tantrum and replaced her. This is ALL on Trump and his FanBoys.

 

Did Carter's AUSTERITY differentiate?

 

Garden variety fixes, work on Garden variety ills. MANMADE out of the natural rhythm stuff, is defferent, and does not respond to logic. NECESSARILY.

 

There is good news. Affirmative Action monetary policy was driving pension funds into bankruptcy. There is a time when enough is enough.

 

You must be joking. Carter left Reagan stagflation and IEDs in the form of crushing minimum wage increases that hammered what Carter didn't destroy.

 

Farm products don't seem to be declining in price any more than the other commodities and supposedly the fed is increasing rates to slow the economy and fears of inflation.

 

Trump's a man not a god and he openly admits appointing the current fed head was a mistake.