Replying to Avatar Laeserin

Powell is hopelessly fighting inflation, already. Longer end is headed up, no matter what he does.
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gojiberra 1y ago

i just understood this from a James Lavish newsletter that the longer rates are set by the market so it doesn't matter what they set the short rates to.

so mortgage rates for houses which are competing with 10 year and longer treasuries are stuck really high, which mean prices have to fall in a big way for houses to be sold.

inflation and deflation smh at the sametime!

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Laeserin 1y ago

Powell only sets the rate for the Federal funds rate, for parking cash overnight at the Fed bank. They hope that lowering this, will lead to other rates going down, but it just leads to consumer price inflation, as the parked money is withdrawn and dispersed.