Re: Turn Out The Lights, The Party's Over
Date: May 03, 2022 02:10PM
Get ready, it's about to get really bad....
With concerns growing over an inevitable recession due later this year, the Federal Reserve plans to raise interest rates at its fastest clip in three decades, the Associated Press reported on Monday.
The maneuver, which will make it costlier to borrow everything, from a line of credit to a mortgage on a home, will also further strain Americans' pocketbooks and likely weaken the economy. But it is considered the only way to potentially stave off the even harsher economic consequences of a wider recession.
Economists predict the first rate hike will hit Wednesday, following a rate-setting meeting where the central bank is expected to announce that it's raising its benchmark short-term interest rate by a half-percent — the sharpest rate hike since 2000.
For months, the president and his Federal Reserve officials assuaged fears over soaring inflation by claiming the crisis was only “transitory” and failing to take steps to reverse the trend.
"We lost a whole year on addressing the issue. Only because, frankly, we have leadership today in America that isn't willing to admit when they're wrong. They made a terrible blunder here, and now the price has got to be paid."
That price would be jacked-up interest rates at the same levels as inflation or higher — meaning above 8.5% — as the only potential way to achieve a “soft landing.”
It seems the Fed now agrees with this assessment. Though even with an interest rate hike plan, many fear a recession is still unavoidable.
“A recession at this stage is almost inevitable,” former Fed vice chair Roger Ferguson told CNBC on Monday. “It’s a witch’s brew, and the probability of a recession I think is unfortunately very, very high because their tool is crude and all they can control is aggregate demand.”
Buy your canned goods now. Tomorrow will start the real panic. Also, make sure you have at least a month's income in cash. Really, you should have 6 months as an emergency fund. Credit cards don't count. If you use those, your interest rate is about to go up, so you'll be doubly-fucked.
But, hey, Joe Biden and Kamala Harris say everything is going great. It is, for them.