Would you prefer they keep rates high? Inflation has dropping pretty consistently for months and was 2.5% y/y last month. Food price inflation was even lower y/y. What action would you prefer the Fed take?
That’s the thing, it’s Congress being a limp dick that forces the Fed to fight inflation with rate raises that inevitable ends hurting workers.
If the inflation induced by the monopolization of key industries and pure greed would have been addressed by legislative action restoring the free market and clawing back windfall profits through smart taxation, people would be better off and would not be looking to elect a fascist.
The “Fed only has this one tool” situation is a false dilemma. Inflation is not the root problem, the oligarchy is.
Rates are not high. 20 years ago they were higher yet - and people are cheering the historically low rates. However if you don’t remember 20 years ago it is easy to think they are high now when in fact they are probably closer to normal.
Do you mean 25 years ago? Twenty years the rate was around 1%. Back in July of 2000 it went up to about 6.5%. But inflation was on the rise at that point. It has sharply declined now.
Inflation may have fallen, but prices haven’t. Additionally, my annual pay is still $12k below where it should be had it only kept up with inflation over the last four years, no raises included.
Anecdotal data isn’t worth much, but I think it’s clear that Americans largely feel the same pressures.
Honestly I think the rate should’ve dropped by 2 or 3 whole percentage points (so like 200 or 300 basis).
The current rates are OBSCENELY HIGH and have not halted inflation even if they have attenuated it to some extent.
The Fed likely knew this damage would occur from this kind of tampering and only now are they acting to curb it.
They’re not obscenely high, they’re obscenely high for our lifetimes, I grew up in the 80s and these are adorable.
But I actually agree with you, our economy has a lot of really f-d up things because we lived on free money so long, we needed to wean slower because otherwise really, REALLY bad things were going to happen (SVB was the tip of the iceberg).
