inflation out of control - Feds - more interest rate raises

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the Feds actions so far have done nothing to tame inflation

they are planning more interest rate increases

these increases have traditionally pulled the stock market down

it's already gone way down recently

plenty more room for it to go down further



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https://www.cnbc.com/2022/05/25/fed-minutes-may-2022.html


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Imo much of the problem now is the FED has the tools to control inflation from the demand side but not really when it’s caused by supply. Nothing they can do about the portion of it caused by the war or China’s zero Covid policy.

OTOH imo rates really shouldn’t ever be below 4% other than extraordinary circumstances or you’ve got a synthetic/fake market. Just robbing Peter to pay Paul for over a decade straight.

I'm afraid this will turn into a political discussion but I want to assure the mods that there is no politics in my post.

This inflation has nothing to do with federal debt.
This inflation was caused by a lack of supply that resulted from Covid shutdowns, shipping and transportation delays, and a lack of employees.

The demand has chased diminished supplies. This allowed prices to rise.

War in Ukraine caused an emotional response that raised oil and gasoline and nat gas prices to unrealistic levels. Oil companies used the opportunity to raise prices to make up for previous losses.

The Fed's previous low rate policy allowed real estate prices and stock prices to rise to unrealistic levels.

I dont know how successful the Fed can be without an end to the war.

Quote: mcallister3200

Imo much of the problem now is the FED has the tools to control inflation from the demand side but not really when it’s caused by supply. Nothing they can do about the portion of it caused by the war or China’s zero Covid policy.

OTOH imo rates really shouldn’t ever be below 4% other than extraordinary circumstances or you’ve got a synthetic/fake market. Just robbing Peter to pay Paul for over a decade straight.
link to original post

it would seem that retailers would be forced to lower prices when buying eventually slows greatly because of this

that is traditionally the retailer's answer to lagging sales

but how can the retailer lower the prices he has to pay to his suppliers__________?

I dunno___________if the sales of suppliers slows greatly I think they will have to reduce prices and then pressure the manufacturers to lower prices

and then the manufacturers will pressure the providers of raw materials to lower prices

and if they can't - maybe the Feds will step in to offer assistance - borrow more money to try and solve the problem

will it work____?_________I dunno________________how bad off are we right now compared to other recessions_____?____ not sure

but the future is very uncertain - and the stock market hates uncertainty



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Well there's 10 weeks of wheat left, so no more food come August?
Diesel shortages are becoming acute, sending pump prices higher and forcing truckers off the road.
There's so much that will go wrong, but a new COVID variant this fall may be worse.

Consumers Face Summer Of Hell As Power Bill Costs Set To Jump | ZeroHedge
https://www.zerohedge.com/commodities/consumers-face-summer-hell-power-bill-costs-set-jump

10,000 Truck Drivers Taken Off The Road Due To Marijuana Violations | ZeroHedge
https://www.zerohedge.com/markets/10000-truck-drivers-taken-road-year-due-marijuana-violations

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the onus is on the Feds to solve these problems in some way

pointing to China as the problem, true as it may be, can only get them so far with the public

if they don't solve it - if the problems don't ease - forget about it - they're out of DC - and a whole new bunch will take a crack at it

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This whole thread is a rule 19 violation and I'm closing it. lilredrooster is issued a strong warning and everybody else who posted, a mild one.