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Inflation or Deflation ahead?

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  1. #221

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    In the US, raising interest rates doesnt have an immediate impact for most mortgage borrowers because most US mortgages are fixed for the life of the mortgage (20 or 30 years).

    In contrast, somewhere like Australia where most mortgages are on variable rates, interest rates have risen for 10 months in a row now and immediately passed on to mortgage borrowers, much more painful, more effective in tackling inflation.

    https://www.news.com.au/world/north-...abd750561b59fc


  2. #222

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    Quote Originally Posted by bdw:
    In the US, raising interest rates doesnt have an immediate impact for most mortgage borrowers because most US mortgages are fixed for the life of the mortgage (20 or 30 years).

    In contrast, somewhere like Australia where most mortgages are on variable rates, interest rates have risen for 10 months in a row now and immediately passed on to mortgage borrowers, much more painful, more effective in tackling inflation.

    https://www.news.com.au/world/north-...abd750561b59fc
    It actually does impact even the fixed rate loan countries as new mortgages will have a higher rate and thus people get a lower mortgage and house prices can drop because of that.

  3. #223

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    The Fed is like a so-called building contractor with a toolbox filled with hammers of various sizes and nothing else.

    The Federal Reserve was closely watching this inflation report. Several indicators have suggested that the economy retains more strength than expected even as officials try to slow growth and cool inflation. Until this week, many economists thought the size of the central bank’s upcoming March 22 rate move would hinge on Tuesday’s data point.

    But now, the Fed’s path is complicated by bank blowups in recent days. Some economists have downgraded how big of a rate move they expect, while others are calling for a pause or even an outright rate decrease as central bankers try to restore stability to the banking system.

    “It’s a strong report,” said Priya Misra, global head of rates strategy at T.D. Securities, adding that she thinks the inflation data will solidify a quarter-point rate increase by the Fed on March 22. “It’s really hard for the Fed to respond by not hiking — or cutting, that’s crazy talk.”
    https://www.nytimes.com/live/2023/03...ederal-reserve

  4. #224

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    Bye bye Santa Fed. Hello Scrooge McFed.

    https://www.npr.org/2023/03/22/11652...2cCtd8hP7tRpKg


  5. #225

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    No worries. Some will say China is our daddy anyway.

    *shitpost disclaimer


  6. #226

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    Just like all major government banks, they always make knee-jerk decisions to overcompensate for the lack of accuracy in their "forecasting".


  7. #227

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    In general almost everything I know of in real world situations plans for the optimistic outcome.. from meals showing up well cooked to airplanes landing to the bus showing up on time to the kid graduating college.

    Just saying that there is only so much we can do accurately without adapting and also hitting the brakes hard or running faster across the road to go faster than the incoming fire engine..

    I am optimistic we will all collectively survive and adapt..

    *Rate hike at 0.25 was expected by everyone I know and read / follow.

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  8. #228

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    Original Post Deleted
    Yes.. I only really follow the GeoWordlers or people who have had a drink or four with me.
    huja likes this.

  9. #229

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    For the tl:dr crowd . . .

    When interest on your debt is more than money you have coming in, that's really, really bad. Home owners with long-term, low interest mortgages are the winners. Credit card and student loan debtors are the losers. Corporations usually have both long-term and short term loans so they are some what protected but are in a bad spot if they need to borrow now or in the near future."

    https://www.economist.com/finance-an...J7jbtjk58d-GlA

    shri and ndt like this.

  10. #230

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    I’ll sit on the fence for now but this is encouraging

    https://edition.cnn.com/2023/05/23/economy/uk-economy-imf/index.html

    huja and traineeinvestor like this.

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