Re:U.S. inflation rate rises to 13-year high of 5.4%
by bumby on Wednesday October 13, 2021 @11:12AM
(#28853186)
You're correct, but I think missing part of the point.
The point was not "raising interest rates at any level will trigger a recession" but rather "raising interest levels an amount capable of combating inflation will trigger a recession".
A 0.00001% hike may not cause a recession, but it also wouldn't affect inflation.
Re:U.S. inflation rate rises to 13-year high of 5.4%
by whimsicalism on Wednesday October 13, 2021 @11:14AM
(#28853214)
Interesting, I don't actually think there's much ambiguity in the statement "any attempt to raise interest rates at all."
Re:U.S. inflation rate rises to 13-year high of 5.4%
by bumby on Wednesday October 13, 2021 @11:24AM
(#28853357)
I'd defer to the OP to state what they really meant, but your response comes across more as a trivial semantic "gotcha" than an actual reasoned response.* If you actually think they meant raising rates by a trivial amount, even though history doesn't indicate that is a tack likely taken, then, yes, you are technically correct.
*Since you are a self-described consequentialist, it may be just that you feel what was stated is all that matters and not what was intended
Re:U.S. inflation rate rises to 13-year high of 5.4%
by greenail on Wednesday October 13, 2021 @01:27PM
(#28854956)
Quoting the CBO: "Growth of Net Interest Outlays. In CBO’s most recent projections, the cumulative deficit from 2021 through 2030 totals nearly $13 trillion. Borrowing to finance that deficit—at a time when interest rates are expected to rise—would cause net interest payments as a percentage of GDP to increase over that period, from 1.4 percent to 2.2 percent, which is generally in line with the 50-year average of 2.0 percent. Over the long term, interest rates are projected to rise further, and the amount of debt issued is projected to grow, causing net outlays for interest to increase to about 8 percent of GDP by 2050."
I don't believe the current rate of increase is anything close to what was projected.
Also, the chart on debt held by the public is very interesting. Raising rates has some big impacts, even small changes.
It's a continua. If we raised rates 0.00001% it clearly wouldn't "trigger a recession", if we raised rates to 25%, it would.
Powell has shown himself to be an effective chairman, I doubt the fed will trigger a recession with rates.