Thank you, Ms. Yellen, for your outstanding service and steady intellect in the face of extraordinary times!
Janet Yellen did an awesome job. If our president was also doing an awesome job, he would have had her stay on. As it is, she’ll probably take a long shower with a lot of soap! That you Ms Yellen for four years of stability!!
Thank you Chair Yellen for all you did for this country!
Yellen, from the moment you stepped on stage, my business went down. Good riddance.
Federal Reserve is again committing economic malpractice, showing that it is the servant of big government addicted to cheap debt.
For 10 years they have been effectively stealing interest from ordinary savers and giving to billionaires, giant banks, hedge funds - the worst form of failed trickle down economics. This is a major unrecognized factor in wealth inequality in USA.
US public debt has exploded since 2001 with no end in sight and will soon reach existential crisis for US economy. And the $15 trillion in new debt has not purchased any long term assets or infrastructure to drive real future growth.
The US needs to audit and abolish the Fed before it is too late to correct course.
4
Mr. Greenspan forgot to mention the crazier than ever real estate bubble that has reinflated in hot markets as investors throw fiat money at “anything” seeking a bit of yield and capital retention. When it crashes this time the whole house of cards will come down: what else should we expect from fifty years of financial engineering and a smoke and mirrors economy.
6
Low rates inflate the value of financial assets. Now when one see financial assets as a product where you buy future cash flows (you buy a share to get dividends, a bond to get coupons… or a house to get/save a rent since properties behave like financial assets), low rates are essentially inflation on financial assets: as rates decrease if you want a given fixed future cash flow (for example “I want $2,000 a month”, or “I want to not pay $1,000 in rent”), you have to pay more.
“Inflation” is the key word here. Low rates are basically printing money, except that instead of all prices going up (ie giving that money to producers), it is the price of financial assets that goes up. You give money to people owning financial assets, and that’s a lot of people (people with 401K, retirement plans, a property they expect to sell one day…), but obviously the richer you are, the more you get. More importantly, someone has to pay for this inflation: people who plan to buy assets in the future. That includes people who haven’t bought their own home yet, and people who will need to save for their retirement. Basically, young people and future generation.
Young people are getting trounced by low interest rates. Low rates mean housing becomes less affordable, and people starting to save now will struggle to get a comfortable retirement. And that’s if rates are stable. If they go up (and they will), people who bought when prices were high will sell when prices are down...
3
I do hope they select the adjectives in their statement carefully, so as not to spook the Masters of the Universe on Wall Street, who are at this moment cowering in a fetal position and hoping their Fed-sponsored party isn't quite over yet.
3
interest rates shouldn't raise too much and too fast because there is a risk of stalling economic growth. It is irresponsible for the federal government to 1. massively increase national deficits and debts no matter what are the reasons 2. not to safeguard those regulations which are in place to minimise the danger of another crash, recession or depression.
2
Can someone explain why the Republicans decided now is a good time to pass a massive tax cut (adding $1.5 trillion to the deficit) that they claim will provide trickle down stimulus to the US economy.
Meanwhile the Fed is gradually raising rates to prevent an overheated economy, since we’re close to full employment.
In 2009 the US economy was at the brink of collapse, but virtually every Republican voted against a stimulus bill (ARRA) at that time, citing concerns about the deficit.
How does any of that make sense?
7
I am concerned that Trump's poorly timed, unnecessary tax plan will cause higher interest rates due to inflation. The economy was doing just fine without it. Now he's taken away a rainy day tool.
4
So many have been critical of the FED since 2008 (think Rick Santelli) and yet they did a very good job of navigating the Great Recession.
A decade of slow but steady growth in employment that restored a strong foundation to the economy with only a little help from fiscal stimulus.
None of the raging inflation that many predicted.
4
Shame on them. They printed money to create this "growth" in the economy when for every cent that went into growth another has gone into asset speculation which ultimately destabilize the world economy when it all comes crashing down. Shame on them. They have given us Trump and economic bragging. Shame on them, they have made the rich richer and the poor poorer.
3
The Federal Reserve stands as one of the more trustworthy institutions associated with our government. During and since the Great Recession, they have managed to bring the economy slowly back to life while avoiding political pressure. Perhaps it's because we appoint qualified professionals without any political axe to grind. Thank you, Ms. Yellen for your service. Let's hope that Mr. Powell has a similarly steady hand on the tiller.
2
Inflation is still low, so this is absolutely justified. Trying to get this comment in before the onrush of comments mongering fear of nonexistant inflation. Persistent undershooting of inflation target is ONE cause of stagnant wages.
A lack of inflation???
Health insurance premiums rose 20% for me and my wife, and as most everyone knows, this is a significant expense.
Auto and home insurance also rose some 7-8% year over year.
Has Ms. Yellen been is a supermarket of late? Just look at the dramatic increases in the price of "healthy" foods like fruits and vegetables.
Legal fees, dentist fees, plumbers, electricians....just about any "service" that can't be performed abroad has risen dramatically. Ours is mostly a service oriented economy and the Fed just doesn't take that into account is assessing the true rate of inflation. As a wise person once said, "Yes, computers are getting cheaper, but I don't eat a computer every day."
The Fed has inflicted what is called "economic repression"...essentially keeping interest rates near or close to zero for close to 10 years while assuring the creation of massive bubbles in the stock, real estate, and bond markets. Prudent savers have been the victims of this repression. So please, don't tell us inflation is "low".
8
Yep, that economy is hittin' on all 8 cylinders - for the .1%, that is, so let's increase interest rates and transfer as much wealth upward as we can.
3
I don’t know Janet
But I did know Ben
Loyalty is a big deal at the Fed, as is politics
This is the biggest bubble ever
The Fed understands the social implications of their efforts and how they led to a Trump Presidency
Right now you’re looking at residential home values (and certain orher assets classes) inflated to valuations in 2050 ... That’s why it feels so absurd on an intuitive level ... Remember in 1980 when inglation made holders of leveraged real estate rich but it did nothing for their intellect. Same, same this time around, only worse.
When you have money in your pocket you are handsome, wise and you sing well too - just like the President.
1
Re: " Fed Leaves Rates Unchanged, Citing ‘Solid’ Growth""
Alternative, and likely more accurate headline
"Fed Leaves Rates Unchanged, ignoring Vertiginous Growth"
As Robert Shiller, winner of Nobel Memorial Prize, and the economist who predicted the housing bubble, noted in 2017
"The C.A.P.E. ratio is above 30 today, compared with an average of 16.8 since 1881. It has been above 30 in only two other periods: in 1929, when it reached 33, and between 1997 and 2002, when it soared as high as 44.
In 1929, real inflation-corrected stock prices in the United States lost four-fifths of their value by 1932. And from 2000 to 2003, they lost half of their real value."
Since he wrote this on Sept 27 2017, the Dow gained another 15.6 %
Very much simplified, the Fed drove millions in the casino of the stock market by setting negative real interest rates on T Bills and has yet to formulate a strategy plan on how to safely wind down its past action.
10
Rates should be rising significantly to stifle unbridled economic enthusiasm that is causing the markets to expand too quickly. But the Fed and its governors will do nothing again. This is irresponsibility similar to the lack of federal government action during the runaway housing market that caused the 2008 crash. A lot of people are going to lose a lot of money because Janet Yellen and her Fed refuse to see the handwriting on the wall.
26
I concur with your assessment paul. Although, let's not forget that the runaway housing market was also created and ultimately crashed no thanks to the shoddy and sloppy banking practices that were allowed to occur. There is plenty of blame to go around for the 2008 crash.
What is crucial and key, like you stated, is that neither Ms. Yellen or her crew are doing anything to avoid another crash. Just how much handwriting on the wall will it take for folks to wake up and see what's going on? Gosh, how many indicators and signs must there be prior to another catastrophic market crash?
Between this scenario and the $20 trillion national debt, getting a sound and good night's sleep is getting harder and harder
3
Rates are rising despite the Feds inaction.
I save a lot of money when my daughters student loans do not go up every time they raise it. Lets have the banks and lenders make more money while us poor slobs try to buy a car or washing machine.
2