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Economics & Trade

Hey, my two bucks comes out of the beer fund and is worth it to dream about winning, even though I know the odds make that practically impossible. Lottery is good in moderation.
 
Soft landing seems less likely as time passes.


www.nytimes.com

High Fed Rates Are Not Crushing Growth. Wealthier People Help Explain Why.

High rates usually pull down asset prices and hurt the housing market. Those channels are muted now, possibly making policy slower to work.
www.nytimes.com www.nytimes.com


The inflation stickiness has come partly because of a continued pickup in services costs, which tend to respond to economic fundamentals like wage gains. In short, there have been hints that it may take more of an actual economic cool-down to wrestle inflation down further.
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I understand that quote to mean that inflation wonā€™t fall to the target percentage until unemployment rises.
 
A question for anyone more familiar with macro-economic philosophy - if our current target inflation % requires a certain % unemployment (tightness of the labor market and all that), wouldnā€™t a higher inflation rate (as it is currently) be tied to a lower unemployment rate? If that is the case, how have we as a nation come to decide which levels of unemployment vs inflation are most preferable?
 
it's notable to me that everyone advocating for greater unemployment as a step to bring down inflation is rarely (never?) themselves at-risk of losing their job due accordingly
 
I ordered 5 shirts from an online retailer last night.

All on ā€œback orderā€ except for one.

Evidence that demand is still pretty high, maybe?

Yeah, the majority thinking seems to be itā€™s just gonna take more time for higher interest rates to slow down the economy enough to make cutting rates appropriate. So rates going to stay high/higher longer.

And as long as people can fairly easily find a job and/or reasonably navigate their finances, Inflation isnā€™t going to adequately fall. So, yeah, increased pain appears needed for Inflation control, it seems.
 
ConnorEl said:
I ordered 5 shirts from an online retailer last night.

All on ā€œback orderā€ except for one.

Evidence that demand is still pretty high, maybe?

Yeah, the majority thinking seems to be itā€™s just gonna take more time for higher interest rates to slow down the economy enough to make cutting rates appropriate. So rates going to stay high/higher longer.

And as long as people can fairly easily find a job and/or reasonably navigate their finances, Inflation isnā€™t going to adequately fall. So, yeah, increased pain appears needed for Inflation control, it seems.
Click to expand...

You just ordered five shirts, so yeah, demand must be high.
 
ConnorEl said:
I ordered 5 shirts from an online retailer last night.

All on ā€œback orderā€ except for one.

Evidence that demand is still pretty high, maybe?

Yeah, the majority thinking seems to be itā€™s just gonna take more time for higher interest rates to slow down the economy enough to make cutting rates appropriate. So rates going to stay high/higher longer.

And as long as people can fairly easily find a job and/or reasonably navigate their finances, Inflation isnā€™t going to adequately fall. So, yeah, increased pain appears needed for Inflation control, it seems.
Click to expand...
Or supply chains are still fucked. Maybe your shirts are supposed to ship through Baltimore.
 
myDeaconmyhand said:
A question for anyone more familiar with macro-economic philosophy - if our current target inflation % requires a certain % unemployment (tightness of the labor market and all that), wouldnā€™t a higher inflation rate (as it is currently) be tied to a lower unemployment rate? If that is the case, how have we as a nation come to decide which levels of unemployment vs inflation are most preferable?
Click to expand...
ā€œWe as a nationā€ have never had this discussion. Adjusting interest rates are supposedly the only tool we have but Congress could to other stuff to affect monetary policy and the economy. Itā€™s also rather frustrating because we get trickles of information that inflation over the last few years has been at least partly due to corporate profiteering and not to ā€œover employmentā€ or whatever, but there is not serious discussion at the policy level to address that contributing factor.
 
Everyone knows that all the shirts made in Asia come through Baltimore.
 
Yeah, probably these are made in Vietnam, so have to be indirectly related to the Baltimore situation if at all. But still some supply chain problems out there, apparently.

Regardless, the back order status of 4/5 ordinary shirts suggests to me that supply is lagging demand in this anecdote.
 
birdman said:
ā€œWe as a nationā€ have never had this discussion.
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Let me clarify - I realize the Federal Reserve BOG and Chairman are nominated and confirmed, and they make decisions years in advance, but I was more specifically asking about the goals and targets that they have set for the country. Are these current inflation targets and unemployment leveraging based on historic precedent?
 
Sorry, I forgot that the West Coast has no shipping issues, and I totally wasn't using Baltimore as a recent example of supply chain issues instead of a specific answer in this case.
Biff Tannen said:
Everyone knows that all the shirts made in Asia come through Baltimore.
Click to expand...
 
myDeaconmyhand said:
Let me clarify - I realize the Federal Reserve BOG and Chairman are nominated and confirmed, and they make decisions years in advance, but I was more specifically asking about the goals and targets that they have set for the country. Are these current inflation targets and unemployment leveraging based on historic precedent?
Click to expand...
I think itā€™s all based on economic research and theory and historical analysis. I donā€™t think there has ever been a discussion on why 2% inflation is the accepted target but 2.5% is worth culling 1 million jobs over.
 
i mean, the full-employment discussion has been around for a long time

Keynes being its most famous theorist
 
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