during those years the corporate/investors focus was on market share growth, so they purposely went for low prices or free when possible. when the money spigot turned off things switched from growth to profit/dividend and consumers are stuck.
Yes, the low interest rates we had for years meant basically free money for all these companies in addition to the low car loan and mortgage rates that the rest of us benefitted from. Interest rates being low was a tool used to pull us out of the recession but nobody had the balls to raise them back when things turned around because you can't win elections by forcing people to take their medicine.
It's the opposite, inflation actually decreased after the rate hikes.
which rate hikes/time period are you talking about?
We had the most inflation in 2022, then the Fed increased rates and the inflation went lower as the rates went higher
You can't just throw an image up. You have to source it or we're going to assume you made it in MSPaint. But you're already showing signs of not understanding what inflation is. It is not some stand alone year by year metric. It's a velocity measurement. Like your car's speedometer. You drove X number of miles in Y time. Instead here it's you rose X points in 1 year. The previous points do not go away. The wage increases from year 4 do not magically erase inflation from years 1-3, unless they beat year 4 inflation by the the sum of inflation from years 1-3.
You're the one who doesn't know that inflation is curbed by interest rates, since you proposed interest rates increase inflation
In fact, higher interest rates decrease inflation
Where in my comment do I even mention interest rates? At any rate, you're not wrong that they're supposed to curb inflation but they haven't. You're own source says-
Leila Bengali decomposes inflation into interest-rate responsive and unresponsive categories. (whether each inflation category has historically declined >after a surprise interest rate hike)
Current excess inflation is entirely due to the unresponsive categories.
That's that flat red section. It's unresponsive to the rate change. You can see the blue section responded even before the FED actually made the change. That's when the FED made statements about raising the rate. So we can see that the responsive section was very responsive. But the unresponsive section is keeping rates from properly coming down.
When the Fed makes statements, banks already respond because it affects the curve. If you expect higher rates in the future, you wouldn't accept longer duration bonds right now for the current smaller rate.
So a statement that rates will be increased actually moves them for anything other than the current over night rates
Yes, that's the blue section. The Red section it turns out is the housing sector, that DGAF because they're heavily coordinating prices and there's no cheaper alternative.
Yes, which is dominated by NIMBY policies and housing prices increases in places like SF where building is almost non-existent
Places like Texas only had increases of 0.6%
Now do Metro Area Rent. And do it over the last 4 years. Housing is screwed because of the high interest rate loans locking homeowners in place and dropping the available stock. Landlords however just declared open season on their renter's wallets.
I didn't get why you're so resistant to this? We know where the bottleneck is before our economy hits stagflation. We can fix this. And then we'll all celebrate being able to afford celebration again.
during those years the corporate/investors focus was on market share growth, so they purposely went for low prices or free when possible. when the money spigot turned off things switched from growth to profit/dividend and consumers are stuck.
Yes, the low interest rates we had for years meant basically free money for all these companies in addition to the low car loan and mortgage rates that the rest of us benefitted from. Interest rates being low was a tool used to pull us out of the recession but nobody had the balls to raise them back when things turned around because you can't win elections by forcing people to take their medicine.
It's the opposite, inflation actually decreased after the rate hikes.
which rate hikes/time period are you talking about?
We had the most inflation in 2022, then the Fed increased rates and the inflation went lower as the rates went higher
You can't just throw an image up. You have to source it or we're going to assume you made it in MSPaint. But you're already showing signs of not understanding what inflation is. It is not some stand alone year by year metric. It's a velocity measurement. Like your car's speedometer. You drove X number of miles in Y time. Instead here it's you rose X points in 1 year. The previous points do not go away. The wage increases from year 4 do not magically erase inflation from years 1-3, unless they beat year 4 inflation by the the sum of inflation from years 1-3.
Source:
https://twitter.com/ah_shapiro/status/1777696160691704213
You're the one who doesn't know that inflation is curbed by interest rates, since you proposed interest rates increase inflation
In fact, higher interest rates decrease inflation
Where in my comment do I even mention interest rates? At any rate, you're not wrong that they're supposed to curb inflation but they haven't. You're own source says-
That's that flat red section. It's unresponsive to the rate change. You can see the blue section responded even before the FED actually made the change. That's when the FED made statements about raising the rate. So we can see that the responsive section was very responsive. But the unresponsive section is keeping rates from properly coming down.
When the Fed makes statements, banks already respond because it affects the curve. If you expect higher rates in the future, you wouldn't accept longer duration bonds right now for the current smaller rate.
So a statement that rates will be increased actually moves them for anything other than the current over night rates
Yes, that's the blue section. The Red section it turns out is the housing sector, that DGAF because they're heavily coordinating prices and there's no cheaper alternative.
Yes, which is dominated by NIMBY policies and housing prices increases in places like SF where building is almost non-existent
Places like Texas only had increases of 0.6%
Now do Metro Area Rent. And do it over the last 4 years. Housing is screwed because of the high interest rate loans locking homeowners in place and dropping the available stock. Landlords however just declared open season on their renter's wallets.
https://www.wsj.com/economy/housing/once-americas-hottest-housing-market-austin-is-running-in-reverse-94226027?mod=e2tw
Landlords only follow the market rates, so housing can easily decrease in price when you actually build
Here's some numbers from a local paper that's not paywalled.
Here's the very enlightening graph.
And finally, here's what landlords think about "just following the market"
I didn't get why you're so resistant to this? We know where the bottleneck is before our economy hits stagflation. We can fix this. And then we'll all celebrate being able to afford celebration again.