Federal Reserve hikes interest rates 0.25
percentage point
CBS News,
by
Irina Ivanova
Original Article
Posted By: Dreadnought,
2/1/2023 2:44:18 PM
The Federal Reserve is raising its benchmark interest rate a quarter of a percentage point, officials with the central bank said on Wednesday, its eighth consecutive hike as policy makers try to subdue inflation.
The latest increase in the federal funds rate — what banks charge each other for short-term loans — is smaller than the Fed's 0.5 percentage point increase in December as well as a string of three-quarter point moves over the course of 2022. With the latest increase, the Fed's target interest rate is set in a range between 4.50% and 4.75% — its highest level since late 2007. The Fed said its campaign to curb prices
Reply 1 - Posted by:
Northcross 2/1/2023 2:48:10 PM (No. 1392263)
Wait a minute! Joe just stopped inflation in its tracks. So why the additional rate hike?
4 people like this.
Reply 2 - Posted by:
paral04 2/1/2023 2:49:38 PM (No. 1392265)
I know I am not very bright so, I don't understand how raising the cost of money will lower inflation. If borrowing money to fund crops or manufacturing materials costs more, then that increase will be passed on to the consumer. Could someone more erudite than I tell me where I am wrong?
6 people like this.
Reply 3 - Posted by:
GoodDeal 2/1/2023 3:33:10 PM (No. 1392287)
Thus adding more cost for interest service on the National debt borrowing. Just in time to raise the debt limit. This is blood for Dracula bankers.
2 people like this.
Reply 4 - Posted by:
valinva 2/1/2023 3:36:34 PM (No. 1392289)
#2 Inflation is a monetary phenomenon caused by too high of a money supply (M1) where too much money is chasing too few goods thereby causing the price of the good to rise because the money is worth less. This was one of the first lessons I learned in my Money and Banking Econ class back in the 1970s when inflation was really roaring and Gerald Ford was issuing WIN (Whip Inflation Now) buttons like the dolt that he was.By lessening the amount of money available by raising the cost of borrowing, the price of goods will fall relative to the dollar because there will be fewer buyers who can afford the goods.
8 people like this.
Reply 5 - Posted by:
valinva 2/1/2023 3:41:01 PM (No. 1392293)
FYI, this .25% increase in the interest rate just raised the amount of interest the US must pay annually on the National Debt by over 78 Billion Dollars ($78,000,000,000). Let that sink in when Biden refuses to cut spending in order for the Republicans to agree to raise the debt ceiling.
2 people like this.
Reply 6 - Posted by:
JHHolliday 2/1/2023 3:52:09 PM (No. 1392299)
I notice that the market had another good day. However, I am old and don't have time left to ride out the sell-offs. If I can claw back some of the money I lost during this last one, I am considering moving to CD's if the rate banks pay gets close to 6%
4 people like this.
Reply 7 - Posted by:
Son of Grady 2/1/2023 4:28:27 PM (No. 1392308)
The economy has experienced the Earthquakes with rate hikes,
soon to come the Tsunamis of earnings misses and layoffs.
Which will lead to more government spending and printing.
0 people like this.
Reply 8 - Posted by:
Rich323 2/1/2023 5:03:10 PM (No. 1392324)
This is their first step to avoid the coming DEPRESSION! That’s right a depression is on the horizon if you listen to the real financial experts. Major corporations laying off thousands of employees, inflation, gas going up again, etc. Try to save as much cash as you can or times you can barter with if stores empty out and prices become out of reach.
2 people like this.
Reply 9 - Posted by:
DVC 2/1/2023 5:52:45 PM (No. 1392351)
We are still at something like 7% inflation which is WAY too high. Gotta slow down the creation of money, which is by the Fed.
2 people like this.
Reply 10 - Posted by:
stablemoney 2/1/2023 6:04:17 PM (No. 1392362)
I think blaming the Fed is and has been nothing but a deflection of blame from the real culprits, which are the Congress and the Executive spending more money than they collect in taxes. Our government is now financed 50% by inflation, not taxation. The Fed is forced to blame for manipulating the interest rate. Taylor has proposed the Taylor rule for years which would set the interest rate at the inflation rate plus 1% automatically. Sounds good, but the government measures the rate of inflation, and would change that definition where up would be changed to down.
0 people like this.
Reply 11 - Posted by:
DVC 2/1/2023 8:42:47 PM (No. 1392477)
Re #2, loans effectively "create" money because the money is simultaneously in two places at once, "in" the bank and "out" being used to buy a house or new car. Creating too much money is the root cause of inflation.
Monetarists say that reduction in the money supply is the way to reverse the excessive creation of money that caused inflation.
When the Dems wrote $4 trillion in new spending, at least 40% of that money was created from thin air because they didn't have the tax revenues and just used deficit spending, created government bonds ...from thin air.
So, WE are pinched because the Dems were creating money out of nothing.
But the Fed has only a few levers, and can't prevent the out of control Congressional spending.
2 people like this.
Reply 12 - Posted by:
SALady 2/1/2023 10:36:04 PM (No. 1392532)
Can someone please explain to me why these fed interest rates are causing mortgages and loan interest rates to skyrocket, but interest paid on savings accounts hasn't budged a bit???
Something just stinks in this!!!
0 people like this.
Below, you will find ...
Most Recent Articles posted by "Dreadnought"
and
Most Active Articles (last 48 hours)