They'll always "fix" it, until they can fix it no more. We are addicted to easy money.<p>$35 trillion of national debt.<p>$1 trillion in annual interest payments alone to service that debt.<p>Cumulative inflation of 66.3% over the last 20 years (based on CPI, it's probably actually worse).<p>Highest "Home Price to Median Household Income" ratio in the last 70 years, currently higher than the last housing bubble.
On the other hand it is genuinely hilarious that what it took to crater tech stocks was someone going "Hey are you guys ever going to make money with any of this AI crap?" "I mean, if you keep giving us billions of dollars, maybe in like a decade. But uh keep doing it, they're totally going to think any day now."
I would hope that the Fed President would say this, even if they don't believe it. Imagine the reverse, "hey folks, basically if the economy gets any worse we're cooked, but please keep spending money and investing and shit thank you"
This seems like a very run of the mill statement, is there something noteworthy here other than an opportunity for folks to riff off this on some related topics?<p>And is it my imagination or is most of the OPs activity just cnbc submissions?
The Fed is haunted by the ghost of inflation from the 70s and 80s.<p><a href="https://www.federalreservehistory.org/essays/great-inflation" rel="nofollow">https://www.federalreservehistory.org/essays/great-inflation</a><p>And the interest rates - <a href="https://fred.stlouisfed.org/series/FEDFUNDS" rel="nofollow">https://fred.stlouisfed.org/series/FEDFUNDS</a><p>And you'll see in that the "ok, it's going in the right direction, cut the rate, and inflation spikes again ... " and doing this again and again. My crystal ball says that this will be a slow backing off rather than trying to revisit what the 80s had.<p>That said, with monetary policy, there are very few knobs to turn. Fiscal policy has as many knobs to turn as they want, but is mired in politics and (not infrequently) goals that work out of alignment with the central bank's goals.
great. with what new parlour trick?<p>Quantitative easing was the high speed drag fuel used to propel us to "these uncertain times." doubling down on QE for covid turned the housing market into a bulletproof bubble. Cranking interest to clinton-era levels basically tapped the brakes on inflation so a food crisis didnt threaten to dissolve the union, but it also didnt translate into a personal savings gain.<p>return-to-work mandates have failed, so we still have the looming corporate real estate crisis with over a trillion due in the next 40 months.<p>the average US auto loan is now somewhere beyond 80 months, and auto lending defaults have spiked as of 2023, so theres that bubble.<p>the education lending bubble was getting some assistance until loan forgiveness was basically cancelled. theres another 1.73 trillion dollar bubble.<p>and finally the US credit card debt rate is another 1.15 trillion dollar bubble ready to pop. <a href="https://www.npr.org/2024/05/14/1251295805/credit-cards-debt-inflation" rel="nofollow">https://www.npr.org/2024/05/14/1251295805/credit-cards-debt-...</a>
the Fed thinking it can "fix" the economy is exactly how we ended up here<p>they'll try again with rapid and deep rate cuts, and we'll be back to raging inflation and asset bubbles without the necessary wage growth<p>at what point do people realize that the price of a forever-growing stock market is a four-digit weekly grocery bill?<p>we're running out of corner to paint ourselves into