Prices, Inflation, Deflation, Interest Rates & The Federal Reserve

Uzisuicide said:
^^^^^ They're convinced that the Fed rate cuts will begin February or March.
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I expect dropping interest rates for the next few months, either with the Fed holding steady and mortgage rates creeping slightly further down, or with the Fed actually dropping rates and mortgage rates dropping a little more strongly. I think there is pressure on the Fed to try to boost the economy and make people feel better off going into the elections.

I think this will be a brief opportunity to obtain lower interest rates, but I expect long term trends will force the rates back up, likely by later in 2024.
 


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This is usury. That’s what causes this. Keep bombing the only people holding the line against usury. American “freedom” is banking freedom. The freest Americans are banking Shylocks with very little regulation to destroy the middle class thru compound interest loans. Call me anti semitic all you want it’s a mathematical fact.
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Thomas More said:
I expect dropping interest rates for the next few months, either with the Fed holding steady and mortgage rates creeping slightly further down, or with the Fed actually dropping rates and mortgage rates dropping a little more strongly. I think there is pressure on the Fed to try to boost the economy and make people feel better off going into the elections.

I think this will be a brief opportunity to obtain lower interest rates, but I expect long term trends will force the rates back up, likely by later in 2024.
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What's your take now?

I don't see rates going down unless something breaks. I do believe that in the next 3-6 weeks we have a lot of things that can pop up that finally cause the skittishness and/worrying about credit and banking integrity to drastically increase.
 
Blade Runner said:
What's your take now?

I don't see rates going down unless something breaks. I do believe that in the next 3-6 weeks we have a lot of things that can pop up that finally cause the skittishness and/worrying about credit and banking integrity to drastically increase.
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I'm buying a house right now, so I've been watching mortgage rates hoping they would drop. Since I wrote that post, they stayed mostly flat, or down a tenth or two.

Everybody was expecting the Fed to lower rates in March. However, about two weeks ago, the Fed said they won't lower until May, and this caused mortgage rates to come back up, almost a half a point.

I still expect the Fed to drop rates in May, and a few more times this year. I don't know how much, maybe 0.75 - 1.0% lower. This ought to drive mortgage rates to 6% or a little lower, I expect. The Fed says they are worried about taming inflation and hoping for a soft landing, but now people are worrying we will drop straight into recession. I would expect this to increase pressure on the Fed to lower rates. I would expect them to lower rates in hopes it will help the Dems hold the White House and make gains in Congress.

Let me step farther back though, and say I think this is all rearranging chairs on the deck of the Titanic. The Fed and all the economists are saying these things about the interest rates, and I think they will follow this playbook in the short term, through the election in November at least.

However, I think the exploding Federal Debt, and the exploding cost of interest on that debt will bust the budget wide open. Add to that the effects as the US$ loses more and more of its status as an international reserve currency, and I expect strong inflationary pressures in 2025 and beyond. I don't even know how they will handle this. I expect pressure to force interest rates up, but I expect them to print money to try to avoid raising rates.

Of course, printing money will cause inflation, so I expect a big mess. I expect the federal government to find itself forced to cut spending by half in inflation adjusted terms. I expect Social Security, Healthcare spending, and Defense to be cut sharply. These have been the third rail of American politics, but it will become impossible to avoid cutting these by half or more.

This sounds like classic doom posting, but when the interest on the debt grows to the point where it is equal to all current tax revenues, the government will be bankrupt. Interest is already up to 25% of total current tax revenues, so the death spiral has started. The higher the interest expense, the faster new debt continues to be added.

However, I do expect rates to drop some this year before the storm really breaks loose.
 
budoslavic said:


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Prices are set by supply and demand. With distortions.

Either there’s a reason why more people are renting making a surge in house rental prices of houses or the demand remained stable and for some reason there’s less houses available.

Or maybe a concentration of companies in the same area.

The same for income. Either there’s less demand on American workers or the demand is stable but there’s less companies.

I don’t see how usury play a significant role in this. But I could be wrong. Maybe in the sense that central banks are dictating through interest rates blackmail policies to governments.

Regulation is beneficial mostly for big companies. Which have the power to hire and create compliance departments.

The problem with western countries is the reckless consumerism of cheap worthless junk imported from shit countries. Also the power of multinationals is too strong. They should all be broken. Economic powers are much stronger than political powers at this moment. And this is a perversion. Specially central banks. National central banks should be disbanded. And only regional central banks created. If any.

There’s too much internal regulation and too little external regulation. On the shit that enters west countries.

Between western countries there should be some form of free trade.
 
Thomas More said:
I'm buying a house right now, so I've been watching mortgage rates hoping they would drop. Since I wrote that post, they stayed mostly flat, or down a tenth or two.

Everybody was expecting the Fed to lower rates in March. However, about two weeks ago, the Fed said they won't lower until May, and this caused mortgage rates to come back up, almost a half a point.
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Making short term guesses on these things is like predicting whether Apple stock will rise or fall today (I'm guessing rise--just checked and it's it's down 0.9%). Making financial predictions on anything shorter than a year is really just guessing.

In the long term, America's enormous debt means continued inflation of the dollar, which will lead to rapidly increasing prices across the board. This is unavoidable. However, there are 2 caveats to home ownership. The first is in the short term things can do whatever (and in fact the jewish usury class thrives on change and fluctuation and they make tons of money every time prices go up or down). The second is that home ownership is a unique area because it is such a huge need for the public of the nation and it is heavily subsidized by government (PARTICULARLY in the USA--that is one area of socialism we actually have).

Government fixing lending rates (just another form of price fixing) at levels below what is needed to provide both payback of principle at inflation adjusted levels and a risk rate for default, not even mentioning profit of the lender) is something that can and probably will be done going well into the future. I'm a bit mixed on whether government should fix lending rates, but if it offered a set deal (ie you can borrow with 20% down at 5% rates based capped at 1/3 of your income) that is not necessarily a bad thing for a society. What is terrible (not to mention unfair to those born at the wrong time) is to offer them at 2% one year and 8% a few years later, just varying the amount of usury for no good reason.

The federal reserve is wrong in thinking that home mortgage price fixing effects inflation--perhaps credit card rates would but those are freely set (and at much higher rates), which is their rationale for varying the borrowing rate over time. I think they probably know this and it is just a justification for this system which allows Jews to make tons of money on arbitrage, and also financing costs (the largest municipal bankruptcy in history was caused by a giant bond refinancing scheme that made the facilitators millions in fees).

But the bottom line is subsidies for home purchases are likely to continue in order for housing costs to remain (somewhat) affordable to the public, so I would expect borrowing costs of 4-6% to be pretty typical. Particularly with housing prices so high, anything more than that means people simply can't afford even a modest a place to live. The alternate theory would be they will implement the You Will Own Nothing And Love It plan, so they want high costs and high borrowing (we already have high costs, and high borrowing rates can be implemented instantaneously).
 
"...Money, being naturally barren...to make it breed money is preposterous and a perversion from the end of it's institution, which was only to serve the purpose of exchange and not that of it's increase. Men called bankers we shall hate, for they enrich themselves while doing nothing..." Aristotle

 
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