The middle class is doing a vanishing act while the Federal Reserve bails out the corporate bigs who use the lower interest rates to lure suckers into making purchases that lead to default and further erosion of the ability to make a living. Lower interest rates have not lead to living wage jobs. The minimum wage is being raised by the more progressive states to help those who have slid further down the economic ladder, but that is a token effort. The Republicans in control of Congress aren't going to help. Yellen just makes a bad situation worse.
The Fed understands how weak the "real" economy is. We have the lowest work participation rate in decades, no wage growth and massive impossible to repay debt. Conditions are so fragile that a 0.25 % increase is untenable! Free money for Wall Street speculators to bid up asset prices, CEO's to borrow for stock buy backs that do nothing for the economy except increase the value of their own options and mis allocation of money such that a glut of steel, oil and other commodities collapse in value is the result of Fed policy. I worry that a day of reckoning is coming.
1
What patience, its easier just to do nothing and wait for things to get better than to be pro-active. The economy is too large for one person to make a difference and those who think it depends on who is chosen in any government position as to making things better are deluding themselves, in my life time I have seen a downward spiral in the economy,morals, and overall poor attitude of the population. A majority of the ads on TV are for social security disability lawyers and injury claims. Wealth without work.
The economy moves in cycles and no one can change that. Then we have the unexpected, the proliferation of insane radical groups, oil prices jumping across the spectrum, out sourcing most manufacturing to China, etc.
An economist stated last year, "whats happening in Europe will happen here in a few years" and another one said, "don't live within your means but live below them". Americans don't save but max out their credit cards and cry for the government to rescue them. Harder times are coming.
The economy moves in cycles and no one can change that. Then we have the unexpected, the proliferation of insane radical groups, oil prices jumping across the spectrum, out sourcing most manufacturing to China, etc.
An economist stated last year, "whats happening in Europe will happen here in a few years" and another one said, "don't live within your means but live below them". Americans don't save but max out their credit cards and cry for the government to rescue them. Harder times are coming.
1
All these experts who think they know better than the Fed governors.
If you are so damned smart, then why don't you have your own bank, or at least are in upper management of one.
As for the savers I am averaging better than 5% on investments, it is not hard to do. In the old days, retirees, little old ladies as they called them, bought utilities and bank stocks. They are still paying dividends and the yield is higher than you would ever get from a savings account.
I do not recall anyone using a savings account for retirement, they were used to hold cash, in case it was needed soon.
If you are so damned smart, then why don't you have your own bank, or at least are in upper management of one.
As for the savers I am averaging better than 5% on investments, it is not hard to do. In the old days, retirees, little old ladies as they called them, bought utilities and bank stocks. They are still paying dividends and the yield is higher than you would ever get from a savings account.
I do not recall anyone using a savings account for retirement, they were used to hold cash, in case it was needed soon.
5
David, since you love low rents on money, then will you rent your home in Westchester to me for $35 per month?
During the later part of Dr. Greenspan's tenure at the Fed, he and his colleagues tried not to jolt the market with unexpected policy moves. Thus, by telegraphing his tactics to investors beforehand, the Fed hoped to reduce volatility and use to best advantage the market's ability to adapt to expectations per the Efficient Market Hypothesis. Dr. Greenspan had a paradigm assigning high costs to unexpected policy moves; to be justified, they had to be very beneficial. Dr. Bernanke lead the Fed through the after effects of the Great Recession; although the causative agents for this downturn were set in motion during Dr. Greenspan's tenure. Ms. Christine Lagarde, head of the IMF, recently stated that under Dr. Bernanke's direction: "Unconventional monetary policies helped avoid a financial market meltdown in the initial stages of the crisis... I am convinced these policies were necessary to avert a 1930's style global depression." Thus, Dr. Bernanke's policy moves were hemmed in during the Great Recession by a collapsed financial sector and a dearth of liquidity in many markets. Also, the Fed's balance sheet assets increasingly contained overvalued mortgage investments, undertaken to rekindle the collapsing real-estate market. Private sector banks refused to invest in such risky assets. Given these severe constraints, Dr. Bernanke insisted on adaptable, data-driven Fed decisions during his tenure; and to lightly dismiss such efforts as too pat is misdirected. 3/19/15, 2:57 p, Th
2
I also remember both Greenspan and Bernanke being surprised that banks couldn't "self-regulate" and put the entire financial system at risk. When you follow Milton Friedman's economic theories and believe that all incentives must be applied to the supply side, it creates an imbalance in the model.
70% of the economy is consumer spending. If you give all the tax breaks to people who don't consume, how does that stimulate the economy?
70% of the economy is consumer spending. If you give all the tax breaks to people who don't consume, how does that stimulate the economy?
I wish the NYT business reporters would look into the effect on interest rates of income and wealth concentration.
In other words, there seems to be a glut of capital in the hands of fewer and fewer people (the 1%) while wages (and purchasing power) for the bottom 90% have stagnated. What effect does income/wealth concentration have on interest rates?
There are other underlying structural issues that seem to be perpetuating our economic doldrums. A recent Harvard Business School study found that U.S. companies are not reinvesting their profits but are instead using them to buy back stock and pay higher dividends. What does this business trend imply for job generation and economic growth?
In other words, there seems to be a glut of capital in the hands of fewer and fewer people (the 1%) while wages (and purchasing power) for the bottom 90% have stagnated. What effect does income/wealth concentration have on interest rates?
There are other underlying structural issues that seem to be perpetuating our economic doldrums. A recent Harvard Business School study found that U.S. companies are not reinvesting their profits but are instead using them to buy back stock and pay higher dividends. What does this business trend imply for job generation and economic growth?
2
By transferring trillions of tax dollars and lost interest on savings from the middle class and seniors to Wall Street during the past 6 years, the self-serving Fed has suppressed spending, labor participation, and wages for all but the wealthy, while simultaneously increasing income inequality. The Fed works for the 1%, and will put off raising interest rates as long as it can get away with it.
The country would be much better served by representative decision-making.
The country would be much better served by representative decision-making.
2
Is this what America needs? Do we want/need a Fed Reserve Chairman that is so flexible that we cannot act with confidence? Is she so lacking in confidence in her actions (and words) that she will always take the easy way out and NEVER face the benefits of holding fast to a decision that in the long run will make the USA stronger? Are the markets reflecting a solid recovery or a deficit-funded vaporous wealth perception, which could become a horrific crash that eclipses 1929 in terms of damage and length?
Dr. Yellen has forgotten more about economics, markets, and Fed policy actions than you will ever learn.
She is acting with confidence - you just don't like her going against your beliefs that it's all about market outcomes.
Millions of us other economic morons prefer that she err on the side that might make wages whiz upward at 4% per year.
She is acting with confidence - you just don't like her going against your beliefs that it's all about market outcomes.
Millions of us other economic morons prefer that she err on the side that might make wages whiz upward at 4% per year.
Once rates start to rise stock valuations are going for a ride.
Until the presidential election is over - think interest on debt
Good Lord, these articles dissecting the language of the Fed chair are becoming ludicrous. Business writers spent so long being bamboozled and befuddled by the vague murmurings of Greenspan and Bernanke that they think they need to parse everything Yellin says the same way.
Here's the thing: I have never heard a more plain-spoken Fed Chair than Yellin. I, as someone whose understanding of economics goes no deeper than that of the typical layperson, can understand what she's saying, which is that she ain't raising rates until there is solid proof that the recovery is starting to bring us closer to full employment and wages start rising as a result. (This confuses business writers, who can't understand why someone in the government would actually care about the wages of ordinary people instead of how high Wall Street bonuses are going to be this year.) Since inflation is not a concern right now, why raise rates?
If I can understand this, presumably the Times' business writers can as well. Methinks they are looking for a story where there is none.
Here's the thing: I have never heard a more plain-spoken Fed Chair than Yellin. I, as someone whose understanding of economics goes no deeper than that of the typical layperson, can understand what she's saying, which is that she ain't raising rates until there is solid proof that the recovery is starting to bring us closer to full employment and wages start rising as a result. (This confuses business writers, who can't understand why someone in the government would actually care about the wages of ordinary people instead of how high Wall Street bonuses are going to be this year.) Since inflation is not a concern right now, why raise rates?
If I can understand this, presumably the Times' business writers can as well. Methinks they are looking for a story where there is none.
8
Janet Yellen's sense of humor (yes, there is one) is wonderful and her demeanor perfect.
4
Yes she is likable...she may have to be if our debt really bites us, or the QE.
1
What is she, Clint Eastwood? She works for the banks. She doesn't raise or lower rates based on her compassion for poor unemployed single African-American moms in Detroit. She will raise rates when the she realizes it is game over. She will raise rates when the major players in the gargantuan OTC interest rate and credit derivatives markets tell her they are ready to manage the catastrophe she has helped create.
1
Hah! Dare ya to meet her in a dark alley and say that!
Those market guys have been pushing for interest rate hikes as we flirted with deflation. Why should she waste her time listening to them?
She's just told us it will take rising wages at full employment. She will wait to see some smiles on those single-mom faces.
Oh, did I say she's quickly becoming one of my "sheroes"?
Those market guys have been pushing for interest rate hikes as we flirted with deflation. Why should she waste her time listening to them?
She's just told us it will take rising wages at full employment. She will wait to see some smiles on those single-mom faces.
Oh, did I say she's quickly becoming one of my "sheroes"?
The Federal Reserve is a new and expensive version of "The Wizard of Oz".
3
Expensive to whom? The Fed turned over $98.7 billion in revenue to the American people (the Treasury) in calendar 2014.
2
The Fed and other central banks are well on their way to creating the largest aseet bubble in human history. They've turned the "markets" into a total joke. This will not end well.
3
The Fed is being relied on to do more than it really should because the do nothing US Congress, led by the Party of No, is failing to deliver even as much as a normally patchy fiscal policy for the country.
3
I'll bet the Fed Board and Dr. Yellen would appreciate a positive e-mail for a change...http://www.federalreserve.gov/apps/ContactUs/feedback.aspx?refUrl=/about...
1
Ms. Yellen actually intends to steer this boat. Imagine that?
7
Wouldn't want her job. Good luck to her and the rest of the board.
5
Six years on and the unelected central planners continue to punish savers and pensioners. Why can't they just admit that they failed. Six years of trying to get 2 percent inflation and they couldn't do it. Pathetic.
3
With global financial markets leaning on every word of the 'new normal' (word economy?) Fed-speak, we must ask ourselves: Is "patience" an economic policy virtue or a virtual economic policy? If this trend continues, future Fed chairpersons will sit in front of a TV camera and merely put on the current economic policy 'game face' while excited economists and commentators attempt to interpret some unspoken economic policy intention from a well-rehearsed facial expression...
How wonderful to have a Fed Chief on the side of Labor!
Thank You Democratic Party.
Thank You Democratic Party.
1
well done, Janet! if she and the committee listened to the crazies on the hill (and apparently the crazies on this message board), we would look an awful lot like europe right now: deflation, sky-high unemployment, right-wing fanaticism, and no clear way out.
speaking as a man, I wish we had more woman making decisions in this country...based on facts and reason instead of their gut!
speaking as a man, I wish we had more woman making decisions in this country...based on facts and reason instead of their gut!
9
The Fed's low interest policy has greatly benefited the economy and many, many regular people. People who have been able to refinance their mortgage or purchase a home, purchase a car, or borrow for other large purchases. Retirement accounts have largely recovered from huge losses. Companies have stayed in business.
"Safe" investments have done very well. Income is down, yes, but the value of bond funds has increased as yields have dropped. The 5 year return on a total bond fund is nearly 5%. There are also still cash investments, online savings accounts and CDs that pay 1 to 2+%.
You can argue that housing prices should not have been propped up and are actually artificially high, but you can not argue that people have not benefitted.
"Safe" investments have done very well. Income is down, yes, but the value of bond funds has increased as yields have dropped. The 5 year return on a total bond fund is nearly 5%. There are also still cash investments, online savings accounts and CDs that pay 1 to 2+%.
You can argue that housing prices should not have been propped up and are actually artificially high, but you can not argue that people have not benefitted.
3
So why won't the Fed keep interest rates near zero forever and print more money and give it to us?
The Fed is owned by the major banks and "serves" at the pleasure of the US government. Regardless of what the Fed says, it will always act for the benefit of banks and government. The Fed said it would begin raising rates when the unemployment rate dropped to 6.5%, but they still haven't raised rates because inflation is "too low". Is it too low for main street and the middle class? Or is inflation too low for banks and government? I think the latter. When trying to predict future Fed actions, it is best to ignore whatever officials say and instead try to figure out what the banks and politicians want and need.
5
The Fed should be taking into account the lack of continued Keynsian gov't spending to move the economy forward. Is it true that in the short term, government spending (such as for construction on infrastructure like roads and bridges and urban transportation systems) acts more quickly to spur the economy than simply cutting taxes so money is saved and invested, and the funds eventually finance private construction and production. The right wing yahoos in the Congress who bullspit the public into thinking that government spending is bad and allowing big business to keep the money rather than payits fair share of taxes is so good for all of us. They are the descendants of the 1920's republicans (1920-1932) who gave us the Great Depression. If Nobel prize winner Professor Paul Krugman is so terribly wrong, where are the knowledgeable writers underlining statements in his columns and explaining chapter and verse why he is wrong. Where are they ?
11
While Yellen's removal of the word "patience" may not imply impatience, neither does the Fed's active removal of the word allow us to infer it's continued presence. In the spirit of J.K. Galbraith, I recommend reading all Fed statements backwards as well as forwards. In the meantime, much benefit might come from a more enlightened fiscal policy.
2
"Patience" means the Fed doesn't know what to do.
Free money for banks to manipulate commodities, natural resources and energy while they are buying other banks to get even bigger while the rest of us struggle. Banks aren't doing anything for communities with this money. Nor are companies doing anything with the billions they are sitting on. While corporations are swimming in cash , wages in real terms are falling. It Is shameful.
21
and keeping the stock market bubble humming along for the wealthy
2
Wait a minute. I am middle class inspite of those who think docs are rich. Without the stock market gains I'd be eating beans. No help with retirement expenses from bonds.
1
the only rational to increase rate is to fight against inflation only when the cost of inflation is greater than the economic benefits of GDP growth. we dont have to stop doing good while we start to see the some sign of goodness....
2
Why are so many readers throwing rocks at Janet Yellen and the Fed? The banks (big & little) are holding tons of cash that they could be lending at low rates to businesses or individuals to create jobs or to purchase homes, vehicles, etc. Instead, credit card interest rates remain at near usury levels while wages are stagnant. Why aren't more corporate CEOs smart enough to see that higher wages would decrease personnel turn-over thus lowering overall expenses?
11
So you think that there are all these CEOs out there that aren't smart? You don't think CEOs spend enough time thinking about the trade-offs between wages and employee retention?
1
All of the Fed employees and their edifices in every large city - how much does that cost the taxpayer or do they use their alchemy to pay for it. The fed is one great big tom foolery and too many people don't realize it. Instead of watching the Fed chairwoman pontificate go watch "The Wizzard of Oz".
The Fed doesn't cost the taxpayer one single dime. It is funded by fees paid by banks. I learned that in college 50 years ago. And Wizard is spelled with one Z.
Dr Yellen is as good as it gets - thoughtful and focused. I trust her completely.
11
Good for what - printing fiat dollars to buy government debt. The fantasy won't last forever.
Dear Janet Yellen, thank you for you! Don't let Wall Street bamboozle you into raising interest rates until our economy is firmly on its feet.
7
Why would Wall Street want higher interest rates? They've done incredibly well under ZIRP.
8
I think you can see from the market reaction yesterday that 'Wall Street' has little enthusiasm for raising rates. Its not Wall Street, its jokers in Congress and clowns like Karry Kudrow who are trying to pressure the Fed into doing something most economists think unwise.
3
The Fed's unprecedented printing of money to purchase government
debt is barely budging Main Street. Wall Street, AGAIN, has plenty
of dirt cheap money to bid up stocks and real estate.
We are nearly seven years on from the crash with a paralyzed government
aftaid to spend our way to prosperity for most Americans instead of the rich
and a Fed recapitalizing the banking system with near negative returns on
savings. These are our choices?
debt is barely budging Main Street. Wall Street, AGAIN, has plenty
of dirt cheap money to bid up stocks and real estate.
We are nearly seven years on from the crash with a paralyzed government
aftaid to spend our way to prosperity for most Americans instead of the rich
and a Fed recapitalizing the banking system with near negative returns on
savings. These are our choices?
7
Doesn't feel like a "hot" economy.
For retirees, no safe place to earn interest even as Republicans want to destroy Social Security and Medicare. Pensions are being called "too expensive to sustain" in court cases after cities shifted money from pension funding to pay for basics in the 2008 collapse. If pensions are 'privatized', the banks get ginormous new funds to play with.
In other words, we're had however you slice it.
Points to the Randians & neolibs/cons for ruthless ingenuity.
For retirees, no safe place to earn interest even as Republicans want to destroy Social Security and Medicare. Pensions are being called "too expensive to sustain" in court cases after cities shifted money from pension funding to pay for basics in the 2008 collapse. If pensions are 'privatized', the banks get ginormous new funds to play with.
In other words, we're had however you slice it.
Points to the Randians & neolibs/cons for ruthless ingenuity.
13
Put Medicare in formaldehyde.
Ms. Yellen maybe the most brilliant leader of the Federal Reserve in a long time. She has a unique sense of timing, as to when to raise the interest rate or not. Under Yellen , the US economy will prosper and good times are around the corner. I am yellin' for Yellen.
5
Didn't people say that about Greenspan about ten years ago?
6
Fibersquash,
Yes, people did. Mostly they were, like Greenspan, devotees of Ayn Rand and the unfettered free market--which is to say, people with little understanding of how the world actually works.
Yes, people did. Mostly they were, like Greenspan, devotees of Ayn Rand and the unfettered free market--which is to say, people with little understanding of how the world actually works.
So why does she keep on procrastinating.
The FED has lost all credibility they need to raise rates now or we will head for negative territory which is an utter disaster for America.
2
Your comment doesn't make sense. "Negative territory" of what? Inflation might be too low and might even get negative, but a rate increase is NOT what the doctor would order against that.
1
Yellen knows exactly what she is doing, and is confident enough not to be pushed into anything before the time is right. Naturally there is a contingent that doesn't like that and wants her to fall on her face. Nothing new under the sun.
5
To what "hot" economy is the Fed referring? Are they referring to the economy where nine out of the ten fastest growing jobs pay less $33k a year? Are they referring to the economy whose college graduates have a $35k chain placed around their neck upon graduation? Are they referring to the economy whose labor force participation ismat the lowest level in 37 years? Are they referring to the system that compels people to spend outrageous amounts on super-high deductible health care plans just to make sure that our insurance mafia gets their 18% cut of said economy?
Let's get real: the hot economy to which they're referring is not the real, factual economy. It is the fictitious one--the financial markets--which happen to shudder every time the Fed makes a pronouncement about tightening rates. And it is this very detachment between the real economic conditions of ordinary americans and the cheery rhetoric coming from our leaders that should terrify us.
Let's get real: the hot economy to which they're referring is not the real, factual economy. It is the fictitious one--the financial markets--which happen to shudder every time the Fed makes a pronouncement about tightening rates. And it is this very detachment between the real economic conditions of ordinary americans and the cheery rhetoric coming from our leaders that should terrify us.
29
Vanadias, you've got it all backward.
Dr. Yellen is for:
-letting the unemployment rate go as low as possible - no artificial triggers like 5% (let's be honest - that's a shamefully inadequate goal for America!)
-waiting for sustained wage growth
before she raises interest rates the first basis point.
That's earth-shakingly pro-little guy in Fed circles. I predict she'll be nicknamed for a triumphant Amazon queen before it's all over.
Dr. Yellen is for:
-letting the unemployment rate go as low as possible - no artificial triggers like 5% (let's be honest - that's a shamefully inadequate goal for America!)
-waiting for sustained wage growth
before she raises interest rates the first basis point.
That's earth-shakingly pro-little guy in Fed circles. I predict she'll be nicknamed for a triumphant Amazon queen before it's all over.
I agree completely with you--I don't think Janet Yellen is the problem. She is acting in the spirit of the masses.
The problem is an economic system that is weighted in such a way as to make these goals implausible. All the power goes to capital, very little goes to labor. Almost all the jobs are McJobs and almost none are careers. And, yes, 5% unemployment is a shamefully inadequate goal--but, trust me, I'll take an accurate 5% unemployment figure over one that counts sporadic workers, and doesn't count those who've stopped looking for work.
The problem is an economic system that is weighted in such a way as to make these goals implausible. All the power goes to capital, very little goes to labor. Almost all the jobs are McJobs and almost none are careers. And, yes, 5% unemployment is a shamefully inadequate goal--but, trust me, I'll take an accurate 5% unemployment figure over one that counts sporadic workers, and doesn't count those who've stopped looking for work.
The reason we need higher interest rates is to help savers and those on fixed incomes. Safe investments pay 0.01% at the moment.
The economy is not doing well. It is floundering from structural problems we have. Free Trade Agreements that offshore American manufacturing and lower wages for workers, Tax Policies that reward companies for offshoring American jobs, Consumers who haven't gotten raises in decades can't borrow any more money to spend....
We need higher interest rates to have safe investments. Wall Street bankers can't even comprehend what "safe" is. The Bankers on Wall Street criminally rated "toxic assets" with 'AAA' ratings and then sold those to Pension funds that are required to invest in 'AAA' (SAFEST of SAFE) investments.
But, no prosecution for that criminal activity. Banksters caused more early deaths and suicides than any Muslim Extremist ever dreamed of. But, evidently is perfectly legal to ruin someone financially until they commit suicide or die from stress.
The economy is not doing well. It is floundering from structural problems we have. Free Trade Agreements that offshore American manufacturing and lower wages for workers, Tax Policies that reward companies for offshoring American jobs, Consumers who haven't gotten raises in decades can't borrow any more money to spend....
We need higher interest rates to have safe investments. Wall Street bankers can't even comprehend what "safe" is. The Bankers on Wall Street criminally rated "toxic assets" with 'AAA' ratings and then sold those to Pension funds that are required to invest in 'AAA' (SAFEST of SAFE) investments.
But, no prosecution for that criminal activity. Banksters caused more early deaths and suicides than any Muslim Extremist ever dreamed of. But, evidently is perfectly legal to ruin someone financially until they commit suicide or die from stress.
16
The Fed rate is set to have the inflation in a low range and to have low unemployment. If you want your money to earn money, invest it wisely, e.g. in selected stocks or company bonds. You have no right to risk free income, as the worker has no right to a workplace and pay without risk to lose it.
1
The problem with the FED is they've focused solely on inflation and ignored employment. They changed their formula to even calculate who is "unemployed" in the 1980s. Before 1980, the unemployment statistics included those in part-time work who sought full-time work. It also included anyone looking for work.
Now, the statistics only include those who are receiving unemployment insurance.
This means that the real pain in the market is far higher than the rate shows.
Now, the statistics only include those who are receiving unemployment insurance.
This means that the real pain in the market is far higher than the rate shows.
I understand the need to raise interest rates to counter a significant rise in inflation, but why is there such a huge desire by the media and pundits to raise rates as soon as it is at all possible to get away with it? Even the author of this article refers to the low rates as "struts" to support the economy as if the low rates are intrinsically undesirable rather than an appropriate level given the low level of inflation. We don't want lower inflation than we currently have, or even the potential for deflation.
10
There's a worry that some of what they're looking at may be trailing indicators, and that interest rates take time -- and that they'd rather raise rates gradually then take a larger hike later based on more alarming numbers.
Housing prices tend to look inflated to me, but then I live in a ridiculously expensive and frequently well-off (*) part of the country where the price of a typical condo would buy a pretty decent house in much of the rest of the country.
(*) Although the distribution is extremely skewed as well.
Housing prices tend to look inflated to me, but then I live in a ridiculously expensive and frequently well-off (*) part of the country where the price of a typical condo would buy a pretty decent house in much of the rest of the country.
(*) Although the distribution is extremely skewed as well.
Maybe our out of touch Federal Reserve, Congress and President should tour their kingdom to see what life is like fro the peasants If workers are getting salary increases, they are at or below 2%. If the get bonuses, unless they work on Wall Street, maybe a $1000, but more like $500. insurance goes up, and pretty much wipes out most of the increases. The average American, the peasants, do not think the economy is good. only Wall Street, Congress, the Federal Reserve and the president think it is going great.
If next year's election is a mandate on how well out government si being run, then those in power are in for a surprise. We are more like it was in 1932, then ever. If it wasn't fro teh social safety net; we would have people selling apples on street corners and Bus/Obamavilles everywhere.
With Europe poised to go into deflation, China continuing to decline, and other countries heading to, or in a recession, it won't be long for it to hit here. No one to export to.
So, our aristocrats are completely are out of touch with the masses. Out leaders are out of touch with the masses. The 99% are being left behind, and we have been told "let them eat cake".
So, Go ahead Federal reserve start raising interest rates. Make those with variable loans pay more. Make them start filing for bankruptcy. Make them have less money to spend on consumer good. Go ahead and make the same mistake made in 1938. We do not have WW II to get us out of tisi one.
If next year's election is a mandate on how well out government si being run, then those in power are in for a surprise. We are more like it was in 1932, then ever. If it wasn't fro teh social safety net; we would have people selling apples on street corners and Bus/Obamavilles everywhere.
With Europe poised to go into deflation, China continuing to decline, and other countries heading to, or in a recession, it won't be long for it to hit here. No one to export to.
So, our aristocrats are completely are out of touch with the masses. Out leaders are out of touch with the masses. The 99% are being left behind, and we have been told "let them eat cake".
So, Go ahead Federal reserve start raising interest rates. Make those with variable loans pay more. Make them start filing for bankruptcy. Make them have less money to spend on consumer good. Go ahead and make the same mistake made in 1938. We do not have WW II to get us out of tisi one.
17
That is why the Fed is leaving interest rates alone. The Congress refuses to set up an infrastructure plan recommended by the President. Also if you read the Budget Plans of the Congress;, you can see another 1937-38 debacle occurring again.
6 years ago the Fed said it would rate interest rates when unemployment hit 6.5%. It is below 5.5% and falling and the Fed continues to bleed savers and enrich Wall Street bankers and Washington politicians. Enough.
13
Years ago, the Fed assumed that 6.5% unemployment would lead to rising wages. That is not the case now, and inflation stays low. Savers keep their savings and don't lose it to inflation. If you want to earn more, invest it with risk - there should be no right to risk free income for rentiers.
5
You are ignoring the 2 variables that drive interest rates: his Wage Increases and high Price Inflation. Both are almost non-existent; approximately 1.5 % & 1% respectively. The Fed is right
yes, "invest it with risk"...keep that bubble growing
Audit the Fed, treat them like a private business, not like they are part of the government, which many people erroneously believe.
This is going to be great, watch the fed raise rates, just as another bubble is forming in the housing market. Americans can afford expensive houses when rates are so low, but when rates return to normal, watch out. Its all a house of cards, waiting for a stiff breeze to knock it all down.
This is going to be great, watch the fed raise rates, just as another bubble is forming in the housing market. Americans can afford expensive houses when rates are so low, but when rates return to normal, watch out. Its all a house of cards, waiting for a stiff breeze to knock it all down.
6
"Audit the Fed, treat them like a private business"
How does this even make sense? It sounds like one of those sound bites something like "we need to send all IRS agents to our southern border", or, "if we can beat the unions in Wisconsin we can certainly beat ISIS". It might make someone feel good to spout this in a barbershop or a booth in the local diner but here?
How does this even make sense? It sounds like one of those sound bites something like "we need to send all IRS agents to our southern border", or, "if we can beat the unions in Wisconsin we can certainly beat ISIS". It might make someone feel good to spout this in a barbershop or a booth in the local diner but here?
4
Am not all that financially astute, but from where I sit here in the economically depressed Bronx, it feels like the government including Janet Yellen are not doing nearly enough to get this economy moving. In my neighborhood, store fronts have remained shuttered and people are desperate for jobs.
Maybe because they collect bug fat salary and don't feel the PAIN, they don't feel any immediacy is required.
Maybe because they collect bug fat salary and don't feel the PAIN, they don't feel any immediacy is required.
9
The Federal Reserve doesn't have that many options. There's not much lower that rates can drop, and there's not a huge reason for a business to borrow plenty to invest unless it's seeing increased demand.
The federal government itself probably *should* be buying up state bonds to finance state governments -- I'm specifically suggesting purchasing state-issued bonds rather than simply throwing grant money at the states, in order to encourage the states to invest the proceeds productively rather than frivolously waste it in some politically appealing but financially nutty extravaganza. Financing state governments would help as public sector employment has actually shrunk in many states, IIRC, and a lot have needs that could be better met. However, that would require politicians to seriously talk about the federal deficit and what constitutes responsible spending.
The federal government itself probably *should* be buying up state bonds to finance state governments -- I'm specifically suggesting purchasing state-issued bonds rather than simply throwing grant money at the states, in order to encourage the states to invest the proceeds productively rather than frivolously waste it in some politically appealing but financially nutty extravaganza. Financing state governments would help as public sector employment has actually shrunk in many states, IIRC, and a lot have needs that could be better met. However, that would require politicians to seriously talk about the federal deficit and what constitutes responsible spending.
1
We are nowhere near to where we should be in order to raise interest rates. There is a lot of slack in the economy and wages are hardly moving up.
26
Bernancke was good but Yellen is even better.
25
I have the highest regard for Janet Yellen, and trust her meticulous thoughtfulness completely.
31
Fed translation: We are itching to raise the fed funds rate.
1
a True Headline should read
Janet Yellen isn't going to pay retirees any interest on their savings.
Banks will continue to get 0.25% money to fund their gambling ventures.
Janet Yellen isn't going to pay retirees any interest on their savings.
Banks will continue to get 0.25% money to fund their gambling ventures.
36
I wasn't aware that the fed's mission was to support retirees or to restrain banks from lending.
last I checked, the fed was carrying 100% of the burden for steering this country out of W's mess, while congress (who's job it is to support retirees and restrain banks from lending) has done nothing.
would you prefer that all parts of government do nothing, or that the only apolitical portion of government we have left do something productive?
last I checked, the fed was carrying 100% of the burden for steering this country out of W's mess, while congress (who's job it is to support retirees and restrain banks from lending) has done nothing.
would you prefer that all parts of government do nothing, or that the only apolitical portion of government we have left do something productive?
15
Too bad; put your savings into bonds & dividend paying stocks. Our young and middle age people need jobs & income much more than us old folks collecting pensions & social security need more interest on our cash.
4
Interest rates have effectively been at zero for more than a decade. What is she supposed to do, bump up the interest rate to 10% so that retirees can start earning some dough on their Christmas club accounts?
2
We readers seem to wait for "Rookie Comments" with the idea that they'll be inadvertently informative. Not sure if this is worth doing- in Finance or other matters. JG-
1