Economy Continued Inflation or a recession?

[Gracious Warrior]

The Fed is basically between a rock and a hard place. They have two options, neither is good: cut rates in order to reign in inflation and cause unemployment and a recession or make minimal changes to rates in order to keep the market moving and continue to see high inflation.

What should Powell do?

 

[SakurabasEar]

They will most likely lean towards minimal interest rate increases, periodically, to help with inflation. This is the safest path from what I've read, but it may not be enough to steer us out of this mess anytime soon

 

[Lead]

The Fed is basically between a rock and a hard place. They have two options, neither is good: cut rates in order to reign in inflation and cause unemployment and a recession or make minimal changes to rates in order to keep the market moving and continue to see high inflation.

What should Powell do?

I think you mean raise rates to reign in inflation.

 

[Jack V Savage]

I think you mean raise rates to reign in inflation.

Yeah, we don't need a recession. Just gotta tap the brakes a bit, but given how insanely strong growth has been, we can slow down a bit and still be doing extremely well.

 

[SakurabasEar]

Yeah, we don't need a recession. Just gotta tap the brakes a bit, but given how insanely strong growth has been, we can slow down a bit and still be doing extremely well.

 

[Rob Battisti]

 

[Jack V Savage]

Hmm. Didn't think that would set the hacks off.

 

[SakurabasEar]

Hmm. Didn't think that would set the hacks off.

Lol, whatever mr savage.

The entire fed reserve could crash and you'd still frame it up to a "complete economic success" for the biden administration

 

[Jack V Savage]

Lol, whatever mr savage.

The entire fed reserve could crash and you'd still frame it up to a "complete economic success" for the biden administration

Well, that's a lie, of course (whatever "the fed reserve crash(ing" means). You're projecting your own hackery onto me (as in, "we could see the strongest economic growth in 40 years, and you'd still frame it up as a "complete economic failure" for the Biden administration"). Beyond that, if you have any real disagreement, I'm all ears. But if you have more troll pictures to post to try to prevent anyone from actually thinking and derail a discussion, I'll just ignore you.

 

[Literally Bricked]

I hope they dial it to 110. Would love to buy some more shit for dirt cheap on the market and high rates only helps my LoB.

 

[WhiteMousse]

Well, that's a lie, of course (whatever "the fed reserve crash(ing" means). You're projecting your own hackery onto me (as in, "we could see the strongest economic growth in 40 years, and you'd still frame it up as a "complete economic failure" for the Biden administration"). Beyond that, if you have any real disagreement, I'm all ears. But if you have more troll pictures to post to try to prevent anyone from actually thinking and derail a discussion, I'll just ignore you.

I think people should stop giving you shit, and either say something or shut up. But can you explain what you mean when you're talking about growth? I'm not necessarily disagreeing, just coming at this using the only perspective from which I can come, my own. For me, every expense has gone up by a considerable amount, and my annual increase was 2.5% which is essentially my company spitting in my face. I'm cutting costs and not really seeing any upside. I understand I'm not the end all be all, but I feel like my earning is above average and the sting is real.

 

[Pride23]

Well, that's a lie, of course (whatever "the fed reserve crash(ing" means). You're projecting your own hackery onto me (as in, "we could see the strongest economic growth in 40 years, and you'd still frame it up as a "complete economic failure" for the Biden administration"). Beyond that, if you have any real disagreement, I'm all ears. But if you have more troll pictures to post to try to prevent anyone from actually thinking and derail a discussion, I'll just ignore you.

I think you seem to be a polarizing poster on here and people are probably going to have a hard time taking your views on the economy and inflation seriously when if I'm not mistaken you were in the camp of it wasn't really out of the norm or an issue until recently.

Anyone claiming they know what the right answer is at this point is also someone I would have a hard time listening too.

 

[SakurabasEar]

Well, that's a lie, of course (whatever "the fed reserve crash(ing" means). You're projecting your own hackery onto me (as in, "we could see the strongest economic growth in 40 years, and you'd still frame it up as a "complete economic failure" for the Biden administration"). Beyond that, if you have any real disagreement, I'm all ears. But if you have more troll pictures to post to try to prevent anyone from actually thinking and derail a discussion, I'll just ignore you.

We've been over this before, and your post didn't represent "thinking" at all. Grasping on to post covid GDP numbers. And its a constant from you, I think you actually know better, but this is your version of trolling. So in that way your actually derailing here

 

[Jack V Savage]

I think people should stop giving you shit, and either say something or shut up. But can you explain what you mean when you're talking about growth? I'm not necessarily disagreeing, just coming at this using the only perspective from which I can come, my own. For me, every expense has gone up by a considerable amount, and my annual increase was 2.5% which is essentially my company spitting in my face. I'm cutting costs and not really seeing any upside. I understand I'm not the end all be all, but I feel like my earning is above average and the sting is real.

Talking about GDP growth, primarily. Job growth is part of it. Inflation is a symptom of that. People's individual situations will vary, but the overall stats gives you a picture of the combined individual situations for everyone.

I think you seem to be a polarizing poster on here and people are probably going to have a hard time taking your views on the economy and inflation seriously when if I'm not mistaken you were in the camp of it wasn't really out of the norm or an issue until recently.

Anyone claiming they know what the right answer is at this point is also someone I would have a hard time listening too.

Not really. I was in the camp of thinking way back that we'd A) only likely see high inflation if the economy was really booming, which it has, and B) that we would see inflationary pressure for the first time in decades but that the Fed would likely tighten at tame it quickly. I was wrong about how quickly and strongly they'd respond, and I think the pressure rose more than expected because of a shift from services spending to goods spending, which put pressure on supply chains. And then, of course, this latest stuff with Russia is a whole other issue. I'd also note that I've been here a long time, and I remember people predicting extremely high inflation any month for over a decade, during which time inflation has been extremely low. The future is hard to predict, but if we're writing off someone entirely on the basis of a small prediction error, we should have written off most other people a long time ago (note, for example, that Peter Schiff, who used to be extremely popular here, predicted double-digit inflation by 2010 and never stopped predicting it).

 

[Jack V Savage]

We've been over this before, and your post didn't represent "thinking" at all. Grasping on to post covid GDP numbers. And its a constant from you, I think you actually know better, but this is your version of trolling. So in that way your actually derailing here

My "version of trolling" is thinking seriously about issues and trying to have substantive discussions. How evil of me. And I'm not "grasping" at anything. My only interest is accuracy. I know it's hard to grasp, but your petty political concerns are of no interest to me.

 

[Scheme]

We should just print 2x the money supply, we'd probably have like 10% GDP growth YOY!

 

[Pride23]

Talking about GDP growth, primarily. Job growth is part of it. Inflation is a symptom of that. People's individual situations will vary, but the overall stats gives you a picture of the combined individual situations for everyone.



Not really. I was in the camp of thinking way back that we'd A) only likely see high inflation if the economy was really booming, which it has, and B) that we would see inflationary pressure for the first time in decades but that the Fed would likely tighten at tame it quickly. I was wrong about how quickly and strongly they'd respond, and I think the pressure rose more than expected because of a shift from services spending to goods spending, which put pressure on supply chains. And then, of course, this latest stuff with Russia is a whole other issue. I'd also note that I've been here a long time, and I remember people predicting extremely high inflation any month for over a decade, during which time inflation has been extremely low. The future is hard to predict, but if we're writing off someone entirely on the basis of a small prediction error, we should have written off most other people a long time ago (note, for example, that Peter Schiff, who used to be extremely popular here, predicted double-digit inflation by 2010 and never stopped predicting it).

Agree it's a tough standard to hold people to and not necessarily a fair one as nobody calls it right all the time but it's more likely to be upheld when it's recent and posted on a forum.

I personally have written Peter Schiff off a long time ago. If you have been calling for hyper inflation and the collapse of the dollar for over 10 years, maybe he will be right at some point but he has been extremely wrong for now and missed out on amazing investments while pushing Gold, an asset with very little actual utility. He also moved to Puerto Rico to avoid paying taxes in the US, not someone I can respect even if I don't agree with how our taxes are spent.

 

[MoparOrNoCar]

Yeah, we don't need a recession. Just gotta tap the brakes a bit, but given how insanely strong growth has been, we can slow down a bit and still be doing extremely well.

You said there would not be inflation after trillions of dollars were printed and people were paid to stay at home.

I don't think there is anyone here who is less qualified to give financial advice than you.

 

[Beechwood]

I read a few business market web sights, and the main guy I follow believes the economy is stronger than all to often reported by most in the corporate press. As a result he is leaning toward inflation continuing to run hot for some time. High inflation running for a long while will damage the economy, cause Americans to buy less, in turn slowing the economy.

So in the end I'm glad the fed has decided to become inflation fighters. Inflation is running above 7% at the moment. It would not be surprising is inflation became worse, with Biden and the Democrats policies. To tame inflation the federal reserve will need to raise interest rates higher than the rate of inflation. This is the formula that has worked in the past.

One of his inflation article ~

https://www.billionairesportfolio.com/archives/7558

Last week the Fed laid out a more aggressive path and destination for interest rates.

But the path they telegraphed still leaves them fueling the fire of a hot, high inflation economy through next year. With that, it didn’t sound (at all) like a Fed that was prepared to do “whatever it takes” to slay inflation.

Today Jay Powell may have corrected the mistake. In a prepared speech, he set the expectations for possible 50 bps increments (in rate hikes). And he made it made it clear that the Fed is no longer sitting back and waiting for supply disruptions to normalize. They are looking to bring demand down, to come in line with supply. This is a quite a stark contrast from the inflation-denying Fed of 2021.

In fact, all along the way, they have been telling us that the deflationary forces of the past three decades wouldn’t turn on a dime, and therefore wouldn’t expose us to a dangerous inflation scenario. That’s changed too. Today, Powell’s flip-flop was expressed like this: “it’s hard to say what the economy will look like post recent events, but no one is sitting around waiting for the old regime to come back.”

To be sure, they were (arrogantly sitting back and waiting). But hopefully not any longer.

So, what will it take to beat inflation? As we’ve discussed, in the 73-74 and early 80s inflation spikes, the Fed had to ratchet rates above the rate of inflation to finally get it under control. And if history is a guide, the past five tightening cycles (’87, ’94, ’99, ’04 and ’15), the Fed has averaged about 50 bps of hikes a quarter.

 

[Mr Holmes]

Inflation is back up to 3.4%.