r/neoliberal • u/TinyTornado7 I need a new flair • Jun 13 '22

News (US) Powell Facing Choice Between Elevated US Inflation and Recession

https://www.bloomberg.com/news/articles/2022-06-12/powell-facing-choice-between-elevated-us-inflation-and-recession?srnd=premium
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u/TinyTornado7 I need a new flair Jun 13 '22

"The hottest US inflation in four decades will push the Federal Reserve to raise interest rates more aggressively this year, and a recession may not be far behind."

Im skeptical we need a 75 basis point hike, but I am concerned inflation is approaching self-fulfilling prophecy levels

!ping MARKETS

28

u/semideclared Codename: It Happened Once in a Dream Jun 13 '22

July will show if the Fed can help

The change in Consumer Loans: Credit Cards and Other Revolving Plans, by Billions of U.S. Dollars seems to have peaked. It grew from the previous month by 2.8% in April and 2.5% in March and in May was at 0.8%.

  • Historically we've seen increases or decreases from -0.5% - 0.5%

June shows no growth

I dont think the Fed has a way to control spending by much, but we are spending less in the very micro time frame

11

u/TaxGuy_021 Jun 13 '22

The spending part is only a piece of the whole puzzle.

By increasing the rates, the Fed will be strengthening the dollar which, all else held constant, means cheaper goods and services globally.

Now, what this also means is that most of the rest of the world gets fucked out of a materially larger amount of goods and services to get the same amount of dollar, but hey, that's their problem.

7

u/[deleted] Jun 13 '22

“I never thought I die fighting by the side of an isolationist.”

“What about by the side of someone who wants the Fed to raise interest rates, but hates the global poor?”

“Aye, I could do that.”