The State of the Economy Thread - “Falling inflation, rising growth give U.S. the world’s best recovery”

[Renegade7]

31 minutes ago, tshile said:

Google “fed pausing interest rate hikes” and see which one of the numerous articles are from a source you’ll trust. The short of it is: consensus is people expect the fed to not hike rates next week as part of taking a pause to watch if inflation continues to come under control after the series of hikes. 
 

 

It's not about sources I trust or don't trust, what I'm seeing is a lot of inferring vs skepticism instead locking themselves into a position before they get more data:

 

https://www.cnn.com/2023/05/19/business/fed-officials-rate-pause/index.html

 

Quote

“So far, the data continue to support the committee’s view that bringing inflation down will take some time,” Fed Chair Jerome Powell said Friday in a moderated discussion with former central bank chair Ben Bernanke. However, he noted that there is lingering uncertainty on how much demand will be eroded from tighter credit conditions and the lagged effects of rising interest rates. Wall Street took that to mean a pause is on the table.

 

That doesn't look like an official decision at all.

 

31 minutes ago, tshile said:

so they make their decision next week. But that’s the expectation. 
 

but yes the feds stated mission is to keep inflation under control (targeting 2% I believe?) and they do that by raising and lowering rates as appropriate. There’s a side conversation about how effective these things are at certain points and why. 
 

but it’s not the feds job to do congress’ job. 

 

So I've been told, but at what cost?  What gives me peace is it seems these concerns are growing in the Fed, that their is definitely an inflextion point with respect to how far they can go to meet their inflation goals.

[Ball Security]

24 minutes ago, PeterMP said:

 

I'm not saying that equity in a home isn't useful, but I don't think the "extra" equity (due to the amount home prices have gone up) is going to be extra in terms of having a retirement for most people.  My grandparents sold a home and used that money to buy a new/smaller place that helped them retire in the 70s.  And they bought and sold their home at a time when home values were behaving historically "normal" (going up at about the same pace as median incomes).

 

Did he look at in state?  It would be unusual for an out of state school to give an economic incentive and no in state school to not give at least a similar economic incentive to bring down the in state tuition.

 

(And there are exceptions to every case.  You don't see large increases in out of state students that we've seen over the last two decades with every one of them getting an economic benefit that they couldn't have gotten in state.  Yes in special cases, doing X (selling your home and claiming the "extra" benefit for retirement and some people getting an extra benefit to go out of state that makes going out of state worthwhile.  We aren't seeing the huge increase in people going out of state over the last few decades that we have and every one of them getting an economic benefit that makes that worth while?)

Well, you did say “equity in your home isn’t so useful in your retirement.”

 

For my nephew, I don’t know the full details. I know he got into Tech and JMU. And he’s paying less going out of state than the sticker price of staying in state. Could he have gotten a better deal in VA? Dunno. I do know that it’s very difficult for Fairfax Co kids getting into state schools because they have a set amount of spots. So, not sure if he’d be able to get a better deal. Don’t know for a fact though. 
 

At one time my neighbors had kids at Texas and Denver and I thought, damn, that’s $100k+/yr. How in the world do they do that. Well a combo of military benefits and scholarships make the ticket price irrelevant.

[tshile]

20 minutes ago, Renegade7 said:

 

It's not about sources I trust or don't trust, what I'm seeing is a lot of inferring vs skepticism instead locking themselves into a position before they get more data:

 

yeah… that’s what happens leading up to fed meetings. As well as job reports. And every other routine economic data/decision release day. Opinions come out about what should be expected, consensus forms, and we see how close it is. They’re often close. Because these decisions are, in large part, formulaic and based on economic data. So it’s not a mystery what is likely. Forecasts are not always correct but they are usually close. 
 

 

20 minutes ago, Renegade7 said:

 

That doesn't look like an official decision at all.

 

I original asked, didn’t they say they’re doing this

you asked for a link

i further clarified it’s the consensus opinion on what they will say next week. 
 

which is obviously not the same as an official opinion. We can’t have an official opinion prior to an official opinion being released/stated. 
 

 

20 minutes ago, Renegade7 said:

 

So I've been told, but at what cost? 

this inflation problem was predicted and easily seeable. This is how the fed combats inflation. Sometimes it doesn’t have the result they anticipate. Generally they’re working towards this target.

what I see is people complaining that the fed is doing their job. 
 

what these people should be doing is complaining that congress is not doing theirs. 

[Renegade7]

1 hour ago, tshile said:

what I see is people complaining that the fed is doing their job. 
 

what these people should be doing is complaining that congress is not doing theirs. 

 

I've seen (and said myself) complaints on congress in context the Fed will keep doing their job even if congress doesnt. 

 

Not everyone is being impacted by these changes equally due to their own situations,  people have the right bring up that concern even if this is the expected process.  Some people are better equipped to handle these rising interest rate then others even if that's one of few ways Fed can battle inflation.

 

I don't see this as picking on one and not the other at all, at least I haven't personally for months now in this thread.  While I'm waiting for more bills like CHIPS bill to help directly address supply chain part of this inflation problem from Congress, any reassurance the Fed won't actually raise rates to point we go into recession to battle inflation would be helpful. 

 

Economics is not my strength, playing catch up with how it directly impacts me any family, like interest rates for buying a house.

[TheGreatBuzz]

4 hours ago, tshile said:

I wonder how many of them took advantage of changes that allow you to pull on your 401k early without taxes or penalties to buy houses they otherwise can’t afford. 
 

a) that’s an interesting discussion about short term vs long term and how we enable kicking the can down the road

 

b) if the decision making was good, and I’ve helped people do this and figure out if this was a good idea or not, then it’s sort of misleading because you can say they have no retirement because their 401k is depleted but the reality is theirs retirement is in equity of their home and not easily measurable by these things (whether they stick to their plan or blow that equity, well like everything else that’s their decision, though I’m sure people will do that then claim they have no retirement be because of the system and not take any accountability for that)

 

This reminds me of when the military changed the retirement plan to the new BRS system.  Mathematically, it is a good deal for the Sailors who are smart and disciplined, and especially the ones who aren't doing 20 years.  But the problem with it is most of the kids that enlist are dumb.

[CousinsCowgirl84]

3 hours ago, Renegade7 said:

 

It's not about sources I trust or don't trust, what I'm seeing is a lot of inferring vs skepticism instead locking themselves into a position before they get more data:

 

https://www.cnn.com/2023/05/19/business/fed-officials-rate-pause/index.html

 

 

That doesn't look like an official decision at all.

 

 

So I've been told, but at what cost?  What gives me peace is it seems these concerns are growing in the Fed, that their is definitely an inflextion point with respect to how far they can go to meet their inflation goals.

The fed chairs try not to talk about doing x and then do y because they want the markets to be stable. They are saying they expect to slow interest rates hikes, but also giving themselves wiggle room in case there is new economic data. The signals they give are generally what they do. But I think I made that post after they officially decided another interest rate hike.

 

 

I think the next official meeting is June 14th. I thought people still expecting 25 point move. 

 

Edited June 8, 2023 by CousinsCowgirl84

[ixcuincle]

 

[China]

Fed holds off on rate hike, but says two more are coming later this year

 

The Federal Reserve on Wednesday decided against what would have been an 11th consecutive interest rate increase as it measures what the impacts have been from the previous 10.

 

But the decision by the Federal Open Market Committee to hold off on a hike at this two-day meeting came with a projection that another two quarter percentage point moves are on the way before the end of the year.

 

“We have raised our policy interest rate by five percentage points, and we’ve continued to reduce our security holdings at a brisk pace. We’ve covered a lot of ground and the full effects of our tightening have yet to be felt,” said Fed Chair Jerome Powell at a news conference following the central bank decision.

 

The possibility of further rate increases put pressure on stocks immediately after the news broke, but encouraging talk on the fight against inflation allowed the market to rebound briefly.

 

Click on the link for the full article

[China]

US Treasury To Borrow $1,100,000,000,000 in Six Months, Analysts Warn Move May Trigger Banking Exodus: Report

 

Analysts say US banks could suffer a massive flight of deposits if the Treasury goes ahead with a plan to restore cash balances by borrowing over a trillion dollars.

 

JPMorgan analysts estimate the US will need to borrow $1.1 trillion in short-dated Treasury bills by the end of the year, reports the Financial Times.

 

Analysts say the higher yields now expected on government debt will suck deposits out of US banks as customers become unsatisfied with the inferior returns offered by their savings accounts.

 

Gennadiy Goldberg, a strategist at TD Securities says,

 

“Everyone knows the flood is coming… Yields will move higher because of this flood. Treasury bills will cheapen further. And that will put pressure on banks.”

 

Gregory Peters, co-chief investment officer of PGIM Fixed Income, says that a flight of deposits and the subsequent rise in yields could force banks to offer more attractive rates on their customers’ savings accounts, which could in turn put pressure on small lending firms.

 

“The rise in yields could force banks to raise their deposit rates.”

 

Click on the link for the full article

 

I thought savings account rates already sucked?

[tshile]

They do. And the problem with that thinking is you have to put that money somewhere. 
 

for most people (my understanding) savings are emergency funds or medium term savings for projects or expected life changes. Safety is required with another level of the need being unpredictable. That rules out basically everything else. Everything else increases risk, and usually the lower risk (still higher than savings) is offset by time commitments preventing you from accessing it at the drop of a hat. 
 

Most people that are willing to risk money, already do with whatever their pleasure is. So. Idk what all these people with savings for what I mentioned are going to move their money to…

[CousinsCowgirl84]

I think they are mainly talking about over seas  investors who have their money in the dollar (in us banks) as a hedge against other currencies. If the value of the dollar is expected to shrink it doesn’t make sense as a hedge.  So they would be the ones taking the money out…

Edited June 14, 2023 by CousinsCowgirl84

[Corcaigh]

Not sure why this will make a difference. The average American has no idea how to buy treasuries and as tshile said doesn't want to lock up their savings deposits anyway. And they can already get 5% from a Vanguard MMF, or if Vanguard and other such firms are unfamiliar then banks like CapitalOne offer 4.1% with no restrictions, without having to search for sketchy online banks you may not have heard of.

 

I mean, if they are still getting 0.1% from their bank then they aren't paying attention and I don't see what difference this would make.

[PleaseBlitz]

Not sure the average American has savings. 

[Corcaigh]

45 minutes ago, PleaseBlitz said:

Not sure the average American has savings. 

Most use alternative investments like Beanie Babies and Pokémon Cards

[tshile]

48 minutes ago, PleaseBlitz said:

Not sure the average American has savings. 

Yeah that too. Something like most people couldn’t come up with 2k for an emergency 

[TheGreatBuzz]

54 minutes ago, tshile said:

Yeah that too. Something like most people couldn’t come up with 2k for an emergency 

 

Peasants. 

[Corcaigh]

11 hours ago, TheGreatBuzz said:

 

Peasants. 

I feel we should be doing more to exploit these “people” and make their lives more miserable. After all, they probably deserve it.

 

 

Edited June 15, 2023 by Corcaigh

[GoCommiesGo]

12 hours ago, tshile said:

Yeah that too. Something like most people couldn’t come up with 2k for an emergency 

 

You're very optimistic. 

 

Fortune: 57% of Americans can’t afford a $1,000 emergency expense, says new report. A look at why Americans are saving less and how you can boost your emergency fund

Quote

 And when push comes to shove, the majority (57%) of U.S. adults are currently unable to afford a $1,000 emergency expense.

 

[TradeTheBeal!]

The writer’s strike is moving along…

 

 

[EmirOfShmo]

 

[Captain Wiggles]

🤣

 

[China]

This map shows how much money renters in every state need to earn to afford a 2-bedroom apartment

 

Rent prices in the U.S. are now out of reach for many low-wage earners.

 

A full-time worker in the U.S. needs to make $28.58 an hour, on average, to afford the rent on a modest two-bedroom apartment in their area. In California, Hawaii, Massachusetts and New York, full-time workers must earn more than $40 an hour to do so.

 

They’d have to be paid $61.31 an hour in San Francisco to afford a two-bedroom apartment rental, and $50.67 an hour in Boston, according to a new report by the National Low Income Housing Coalition.

 

In no state, county or city in the U.S. can a full-time worker earning the local minimum wage come up with the costs for a two-bedroom apartment, the NLIHC writes.

 

Click on the link for the full article and the interactive map

 

[Corcaigh]

Sheetz was selling gas for $1.77 per gallon yesterday. Thanks, Joe Biden!

[ixcuincle]

https://www.threads.net/t/CuW4GaEuy91/?igshid=NTc4MTIwNjQ2YQ==

Holy ****. The June jobs report is jaw-dropping. Private sector jobs INCREASED by 497,000 which is 270,000+ MORE than expected. Annual pay also rose at 6.4%. Folks, this is Bidenomics working in real time & it’s simply amazing

[CousinsCowgirl84]

14 hours ago, China said:

This map shows how much money renters in every state need to earn to afford a 2-bedroom apartment

 

Rent prices in the U.S. are now out of reach for many low-wage earners.

 

A full-time worker in the U.S. needs to make $28.58 an hour, on average, to afford the rent on a modest two-bedroom apartment in their area. In California, Hawaii, Massachusetts and New York, full-time workers must earn more than $40 an hour to do so.

 

They’d have to be paid $61.31 an hour in San Francisco to afford a two-bedroom apartment rental, and $50.67 an hour in Boston, according to a new report by the National Low Income Housing Coalition.

 

In no state, county or city in the U.S. can a full-time worker earning the local minimum wage come up with the costs for a two-bedroom apartment, the NLIHC writes.

 

Click on the link for the full article and the interactive map

 

Another example of minimum wage working 💪💪💪

38 minutes ago, ixcuincle said:

https://www.threads.net/t/CuW4GaEuy91/?igshid=NTc4MTIwNjQ2YQ==

Holy ****. The June jobs report is jaw-dropping. Private sector jobs INCREASED by 497,000 which is 270,000+ MORE than expected. Annual pay also rose at 6.4%. Folks, this is Bidenomics working in real time & it’s simply amazing

This threads thing is really bringing us back to 2002 isn’t it?

Edited July 6, 2023 by CousinsCowgirl84