 |
|
Primer On Why Fed Is Raising Rates
Posted on: December 19, 2018 at 16:30:19 CT
econprofaj MU
Posts:
673
Member For:
13.18 yrs
Level:
User
M.O.B. Votes:
0
Let me make it plain to you. This economy was juiced by a combination of tax cuts and deregulation that gave us a sugar boost, but now we're in a period of withdrawal.
Go back in history and you will see that interest rates rise when deficits rise exponentially. This year, we will see the highest increase in deficits since 2012, which is crazy because you reduce deficits during expansion.
The Fed is concerned about the amount of debt taken on by industry. That's generally what happens when the economy is growing too fast. By raising rates, this will prevent businesses taking on more bad debt and hopefully prevent a financial collapse.
Yes, they run the risk of steering the economy into a recession, but Trump and Congress put the Fed into a difficult position.
Go back in history and you will see that interest rates rise when deficits rise exponentially. This year, we will see the highest increase in deficits since 2012, which is crazy because you reduce deficits during expansion.
The Fed is concerned about the amount of debt taken on by industry. That's generally what happens when the economy is growing too fast. By raising rates, this will prevent businesses taking on more bad debt and hopefully prevent a financial collapse.
Yes, they run the risk of steering the economy into a recession, but Trump and Congress put the Fed into a difficult position.
Please explain why this message is being reported.
MESSAGE THREAD
Primer On Why Fed Is Raising Rates - econprofaj MU - 12/19 16:30:19
-