And oil prices are up 1.9% today from yesterday (and it seems to be likely to keep climbing).A Ukraine drone hit one of putin's biggest refineries yesterday
Rate hikes slow down economic activity to some extent and could theoretically lead to lower oil demand.And oil prices are up 1.9% today from yesterday (and it seems to be likely to keep climbing).
I'm not sure how rate hikes will solve that problem.
Shouldn't that lower oil prices? If that refinery can't process oil, there's more oil on the market.A Ukraine drone hit one of putin's biggest refineries yesterday
Shouldn't that lower oil prices? If that refinery can't process oil, there's more oil on the market.
Yes. It means that Russia will have to import diesel. That means all the countries that they will now import diesel from need to buy more oil--temporarily raising oil prices until Russia can get more of its oil out.They sell most of their oil to south and east Asia. So that would mean that those buyers would have to buy from the legal market which is reflected in quoted prices like NYMEX
Yup, bond yields jumped today. But that MIGHT just mean that we don't see rate cuts anytime soon
Look at a historical chart of interest rates. The decade after the 2008 meltdown was an aberration. Financial markets are based largely on trust and that trust died with Lehman.
I'm on a phone at the moment and I'm too lazy to look it up but IIRC historical 'risk free' rates have hovered around 5%. So if I'm correct, with inflation at around 3%, we're doing quite well.
The federal reserve has absolutely nothing to do with how much government debt we have, nor do they really care if the interest payments are too high for the federal government. Controlling government debt and/or affordability of that debt isn't their job. It is actually the opposite of their job. They want government spending to go down with higher interest rates to help cool the economy.we can't have higher for longer as the interest payments near $1T a year.
I agree, but there is a catch. Housing interest rates are not included in inflation. Meaning if the interest rates go up and new mortgages (or variable rate mortgages) are more expensive, then that added expense is not considered to be inflation. If you add the actual cost to actual people into the inflation calculation, then it goes back up again.Housing is one of the major contributors to the inflation and it is high because it is a lagging indicator and because the rate is high. If you remove housing from the inflation, then it is pretty close to 2%.
I have said there would be zero cuts this year.Remember - Wall St projected 6, yes SIX rate cuts for 2024 as they expected a return to ZIRP. The new normal they projected/expected is a 2% Fed Funds rate and sub 5% mortgage rates.
MMT says we need this Govt intervention and with $34, no make that $35T in debt...we can't have higher for longer as the interest payments near $1T a year.
Apple just bought an AI company and is moving the employees to their AI division.Shorting...
NVDA...bloated 1999 dot com
TSLA...market saturation
XOM...because it's about damn time
MSFT...I still use Win 10
AAPL.. no AI
VKTX...worth billions and zero revs
MSTR...fat piggy 🐷
The federal reserve has absolutely nothing to do with how much government debt we have, nor do they really care if the interest payments are too high for the federal government. Controlling government debt and/or affordability of that debt isn't their job. It is actually the opposite of their job. They want government spending to go down with higher interest rates to help cool the economy.
I think you are confusing the federal reserve with the federal government.
In the end, it was transitory. People might not like how it spiked for 2 years. But it came right back down to below the historical 3.4% average inflation.They've done a piss poor job of this as ZIRP was their doing, QE to the extreme was their doing, and statements like "inflation is transitory" is on them.
In the end, it was transitory. People might not like how it spiked for 2 years. But it came right back down to below the historical 3.4% average inflation.
Even if you pretend that the federal reserve is politicized, US government debt affordability is not something the federal reserve has in its mandate. They'd have to blatantly break the law to do things based on the affordability to the US government.If you believe the Fed Reserve has not been politicized...
She may regret calling it transitory. But it still technically was transitory.Yellen kinda-sorta-in-a-way disagrees with you:
Yellen says she regrets saying inflation was ‘transitory’
Treasury Secretary Janet Yellen said she regrets describing inflation in 2021 as “transitory,” the term several Federal Reserve and Biden administration officials used to describe the pandemic-indu…thehill.com
She may regret calling it transitory. But it still technically was transitory.
"1. not lasting, enduring, permanent, or eternal.Dictionary.com | Meanings & Definitions of English Words
The world's leading online dictionary: English definitions, synonyms, word origins, example sentences, word games, and more. A trusted authority for 25+ years!www.dictionary.com
2. lasting only a short time; brief; short-lived; temporary."
The high inflation was not lasting, enduring, permanent, or eternal. It perfectly fits definition #1. Yellen is just discussing definition #2 that has different time spans to different people. This recent inflation spike was shorter than the spike around 1970 and shorter than the pair of spikes from the mid 1970s to early 1980s. But, no it was not just a few weeks long.
Which is why Yellen regrets using the term. As I said above, it means different things to different people.The thing with words that imply a period of time but do not specify a particular limit can apply to anything.
....but you know what?
The Feds target inflation rate of 2% is permanent. Which is odd because we need deflation to make life affordable again.