Re:Ask HN: Why is the stock market up 30%+ from pre-Covid le...
by dragonwriter on Tuesday April 06, 2021 @05:49PM
(#26717806)
Yeah, its not like the same entity that pumps dollars into the economy to boost employment and prevent deflation when it slows down also might take dollars out to restrain inflation as the economy speeds back up.
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Re:Ask HN: Why is the stock market up 30%+ from pre-Covid le...
by bko on Tuesday April 06, 2021 @07:11PM
(#26718514)
Higher rates come w/ a lot of political pain. You saw the prior administration talking about keeping rates low and tying that to low cost of borrowing for the US. It means higher mortgage rates for homebuyers as well.
The Fed has spoken about keeping rates zero until 2023 [0]. Unemployment came down considerably (~6%). Last time it was this level was mid-2014. We started raising rates at ~5% unemployment in early-2016. I think theres a good chance you'll hit 5% unemployment well before 2023, especially considering that the economy isn't fully open yet and we're still vaccinating.
I don't see the political will to raise rates and slow this thing down.
[0] https://www.forbes.com/sites/sergeiklebnikov/2020/09/16/fede...