What rates? A 0.50 rate rise doesn't matter when you have inflation running at double digits already.
Investors are looking for any place to park their money. Expect the pain to get worse unless the FED does something bold for once
American Economics Thread
- Thread starter Bernard
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Investors are looking for any place to park their money. Expect the pain to get worse unless the FED does something bold for once
Do you think the FED will have the "cojones" this time to rise interest rates to 3.5%? or they will chicken out and start printing again?
No. Don't forget that treasuries rates also affect the interest that the US government has to pay for its debt
Publicly 0.5, but those of us in the financial world is expecting .75. This is why the DOW dropped roughly 2500 points in the past 5 days.
Interest rates isn't just 1 number, there are lots of different rates at different maturity intervals - 1 month, 3 month, 6 month, 1 year, 2 year... etc. The 10y that most commercial and consumer products are based on is already at 2.75% today. This is pushing up the typical 30 year consumer home mortgage rate to roughly 5.5% on average today.
To put that into perspective - a 300k 30 year mortgage a year ago was roughly 3%, which results in a 1265 dollar monthly payment. With a 5.5% rate, that same 300k 30y loan now has a 1700 monthly payment. Basically that's an extra 445 a month extra that's getting sucked out of the economy - 445 that isn't going towards eating out at restaurants, a faster speed telecom plan, upgrading the BBQ for the summer, nicer options on the next car, etc. The US FED(and all central banks) prints money, this is how they destroy money.
Hedging against unprecedented inflation in the US.
Look at Poland interest rate, 6% is sure soon. In poland they also printed and made the huge inflation. 
Look at Poland interest rate, 6% is sure soon. In poland they also printed and made the huge inflation. View attachment 87860
So happens that the Russians also cut off their gas supply too.
From European countries which buys gas from Russia, Poland is one of the best prepared to be independent from Russian gas. Still it's not enough to cover all, however until Russia stops all gas to Europe Poland can buy Russian gas from Germany also. The biggest hit Russia my apply is to stop oil I guess.
If they bought Russian gas from Germany, isn't that just the same as buying directly from Russia, but Germany would be acting as a trade proxy? The point of stopping purchasing from Russia, is to cut their revenue source and prevent dependence, if they opt for that method instead, it would just give Germany more price setting power against Poland, while achieving nothing.
What's with this Western obsession with saving face....They don't care as long as they stay the biggest economy nominal, its a American face saving thing...