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A comment on Federal Reserve raises rates by 0.75%. Parent comment

Re:Federal Reserve raises rates by 0.75% by Consultant32452 on Wednesday June 15, 2022 @03:38PM (#31758283)
Speaking of lower middle class and poor people. Powell recently stated that workers had too much power and were able to demand too much higher wages. He intended to create policy to tip the balance of power away from workers to resolve this. I don't believe the well-being of lower middle class and poor people are a concern of his.

https://www.wsj.com/articles/transcript-fed-chief-powells-po...

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Re:Federal Reserve raises rates by 0.75% by trgn on Wednesday June 15, 2022 @04:37PM (#31759143)
Yup. The last few years have also seen some of the highest wage growth in decades, and highest saving rates across the board. All that pent up demand and broadly distributed spending power is fueling inflation now. But, in the balance of things, labor did really well.

It's capital that being severely punished now, with negative returns (on top of inflation), it will take years to recoup losses. Anybody hoping of becoming a rentier (the FIRE crowd, seniors looking to retire come to mind) has seen their plans evaporate the last year.

While the truly rich probably don't care either way, their balance sheets are all shrinking nonetheless.

Low inflation may bring price stability and sanity to the markets, but it will not particularly benefit lower incomes.

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Re:Federal Reserve raises rates by 0.75% by Consultant32452 on Wednesday June 15, 2022 @08:36PM (#31761224)
The truly rich scooped up a bunch of cash and cash equivalents while interest rates were low. Now that there's going to be a price crash in places like housing, they will be scooping up assets like mad while Main St. suffers. People were complaining about how many houses BlackRock was buying, just wait till the crash.

This kind of thing really bothers me, and the more I learn about economics the more I understand why public school economics classes are so poor. If people understood this stuff there'd be a revolution.

I think Warren Buffet once said something to the effect of if the average citizen understood how the federal reserve worked there'd be a revolution overnight. I'm sure I got the person or details of the quote wrong, but I'm too lazy to look it up. Regardless, the sentiment stands.

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