The spending is pretty bad. Do you think we could owe 1 quadrillion dollars by 2100?
How would we pay that amount of debt without inflating the currency 3100% with our current $32T debt?
The biggest issue is our GDP is only $28T
I think the current rate should be 5.5% Fed funds.
I didn’t think we’d survive $30 trillion in debt, but here we are. I do not think we’ll default and I don’t waste my time thinking about it.
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The current rate is 5.3%.
5.3% is in line. I do think 0-0.25% was artificially low
Low rates are great for pretty much everyone except savers that are afraid of the stock market and other investments. IMO owning a home is the second most important financial decision someone can make, low interest rates make that possible. Living within your means is the first and investing in a retirement account as early as possible is third.
About 14-15%.
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No one has ever been able to explain what that looks like.
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Really…based on what?
IMO they’ll hold steady where they are for at least a year or two and then slowly decline. For some reason the Fed’s target has been 2% but I can see that changing in the next year or two to 3%.
Inflation is still going up. We still have more jobs than people. Home prices are sky rocketing. They need a rapid raise in rates to slow the economy and get into deflation
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Yep. How banking used to work before It’s a Wonderful Life was a bank would pay X on deposits and charge Y for loans, the difference paid for the banks operating expenses and profit. Times have changed. I don’t agree with the Fed all the time but I understand why they exist and why they do what they do.
That has more to do with supply and demand.
It’s not as bad as it was, but is still too high. I think the Fed is holding off and see what happens, they have more data and information but they’re just guessing.
I don’t think that would cause prices to deflate, maybe just level out and hold steady
It would cause deflation. There would less demand which would cause prices to decline.
It would cause massive unemployment which is why they haven’t done it.
If they don’t do it. They’ll keep having issues with wages gaps and inflation
Then why are you bitching about the interest rates rising to address inflation
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The banks should determine the interest rates they think is reasonable and that borrowers will tolerate.
The central bank should have significantly less influence.
Banks should only be able to loan their own money.
No, the market would solve the problem.
They do that now, the rate we’re taking about is the Fed’s funds rate. That’s what banks charge each other and the central bank charges.
They can do that now, but according to regulations have to keep enough cash on hand to avoid a run on the bank. That’s where the funds rate comes in, banks can lend out more of their own money knowing they won’t go out of business because a big depositor makes a big withdrawal in one day.
Where did I bitch about interest rates rising? I’m simply pointing out that high interest rates suck for people who carry credit card balances and are looking to buy a home.
The interest rates are up because inflation was at a 40-year high a year ago thanks to a Bidenomics.
The market wasn’t solving it, that’s why the Fed had to increase rates.
We could get rid of the fed but with the current regulations in place banks wouldn’t be lending much money. You could get rid of the regulations and the fed, but you’d see a whole lot of banks going out of business and depositors losing a whole lot of money.
The system needs to be blown up