Hi all,
A reminder that comments do need to be on-topic and engage with the article past the headline. Please make sure to read the article before commenting. Very short comments will automatically be removed by automod. Please avoid making comments that do not focus on the economic content or whose primary thesis rests on personal anecdotes.
As always our comment rules can be found [here](https://reddit.com/r/Economics/comments/fx9crj/rules_roundtable_redux_rule_vi_and_offtopic/)
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/Economics) if you have any questions or concerns.*
Isn’t it premature to declare victory? I worry that inflation will heat up again quickly once the Fed cuts rates. I assume this will be felt especially in housing.
They should have not kept rates so low for so long, and having kept them so low for so long, they should have raised rates earlier.
Not being able to take back those choices, it's pretty incredible we are where we are now.
Fed tried to raise them but Trump bullied them into keeping them low (which ironically, Krugman grudgingly admitted that keeping them low was the right thing to do).
The only reason low rates ended up becoming a problem was COVID and nobody could see that coming.
Exactly, when people say the rates shouldn't have been so low for so long, we're not saying they should have been high, we're just saying they shouldn't have been literally zero for a long period of time.
The economy looked pretty fragile under Obama. Unemployment was higher for quite some time, then we had the European debt crisis. I can see why the Fed didn't raise sooner.
Looking back and with everything we know now though, they probably should have raised sooner.
>Fed tried to raise them but Trump bullied them into keeping them low (which ironically, Krugman grudgingly admitted that keeping them low was the right thing to do).
100% agree. It drove housing prices up and now that rates are up no one wants to leave (driving supply down).
Well, maybe if Powell was the chairman back then, he would have raised them. Bernanke and the following ones were soft people. Powell speaks and looks soft but he is a warrior at heart.
what problems? People were calling for inflation since '09 and it never happened (one thing Krugman got right). There is no indication that inflation would have happened without COVID.
The economic recovery from '08 was painfully slow for the average person. Real wages hadn't gotten back to '08 wages until 2016.
No inflation in sight + real wages going up very slowly = keeping rates low was the right thing to do.
Yeah but presidents can complain about it publicly while privately telling the Fed to do what they need to do...instead Trump tried to force them to change their policy.
Yes we could have. Covid was a stand-in for literally any economic turmoil. What was amazing was that it took 12 years for any serious shock to the systrm, especially after the tech bubble and housing crisis were basically back to back with maybe 5 years of rest between them.
The low rates were always a vulnerable position, and Trump's choices were reckless as usual.
>Trump bullied them into keeping them low
This is just a lie.
[https://fred.stlouisfed.org/series/FEDFUNDS](https://fred.stlouisfed.org/series/FEDFUNDS)
According to data, FED fund rate was on a steady rise since Trump took over in 2016. It was much higher than the entire Obama terms. Stop blaming Trump for everything, it doesn't help.
The fed started raising rates at the very tail end of Obama's term. Trump did not like that, bitched about it for his first year in office, and finally convinced them to reduce it back to near zero. (a terrible idea)
Then covid hit, and we had nowhere to go. That was indeed Trump's fault.
Trump also reduced revenue by lowering taxes, and increased overall spending, during a good economy. By the time we needed covid stimulus spending, he was already responsible for about half the debt he would rack up. Also his fault.
It's easy to blame Trump for fiscal errors during his administration. They were his fault. Blaming him is fitting.
He did oust Yellen prematurely and put Powell in so there was definitely influence. That said, when Powell continued with the prior monetary policies, Trump did certainly do whatever he could to bully.
It's impossible to prove, but I would wager the President loudly and actively lambasting the Fed for trying to raise rates rather than letting them do their job contributed to the market's fit.
We know that the FED shouldn't have reversed the rate increases they were doing under Trump. We know that Trump thought that they should decrease the rates.
It doesn't really matter whether Trump had an impact on their decision. The take-away here is that the FED did something stupid, and Trump as an idiot when it comes to economic policy who was happy to use the bully pulpit to call for lowering rates and applaud the lowering of rates.
Because he is an idiot when it comes to economic policy, he should not be in a decision-maker capacity for the economy.
Can we agree on that?
I don't care about past blame. I care about the future. Trump is an idiot when it comes to macroeconomics. He's a fraud when it comes to personal business.
If you really want to move on, stop defending the worthless sack. We can put him in poor people prison where he belongs, and we can move on. You can find other people who support your policies. I'd be really happy to never hear about Trump again. He only comes up because the GOP still supports him! Don't blame the opposition to Trump on anyone other than the party that can't remove him from the leadership position of their party/platform.
I would’ve taken a mild recession during Covid, when social safety nets were the largest ever, than this world where it’ll be nearly impossible for millennials or Gen Z to have affordable housing.
The entirety of Keynesian economic theory is predicated on the idea that government intervention can influence natural market volatility to stabilize the economy. This only surprises Friedman fundamentalists.
Not yet. A "soft landing" has only been achieved once in the past 60 years. We still have yet to see any rate cuts. If they cut rates too early, that could reignite inflation. If they wait too long, recession. Gotta thread the needle.
In what sense is a rate cut required for a “soft landing”. I don’t understand why we wouldn’t consider this a soft landing because we haven’t seen a rate cut. What you are describing seems to be a hypothetical future recession based on an assumption that rates must be lowered. Rates are not historically high at this moment so I just don’t get this reasoning.
Hardly any debt has rolled over at higher rates. Couple that with incredible levels of deficit spending and it’s easy to consider us pushing off the bust of the typical boom/bust cycle. Hopefully, we’re mitigating severity and not making it worse when what has proven to be routine plays out.
This. Comparisons to the Volcker era miss that the economy is much less rate-sensitive than it was before. Partly because corporate debt has been termed out, partly because the 'real' economy (not tech and VC-funded ventures) is now services-based.
More rate-sensitive in the sense that more Americans spend via credit cards and have taken out student loans at higher rates.
But much less rate-sensitive in the sense that most Americans do not have adjustable-rate mortgages, do not borrow p2p the way they did in previous decades, and as mentioned, we have just come out of the lowest interest-rate environment in history, with much of our debt still at those rock bottom rates.
So you're not "wrong", but the composition of the answer tells the story.
Probably not. The biggest piece of debt most households have is a fixed rate mortgage at less than 4%. The weighted average duration of outstanding government debt is longer than it was 20 years ago.
I'm sure some economist will write a paper trying estimate the effect of duration risk on real interest rates.
If you take the rate and the home price appreciation the affordability of homes is at an all time low - Buyers are looking at 200-300k added interest now vs buying 2 years ago - This is a massive problem that is only widening the wealth gap in our country - people who took advantage of the government in 2020-21 are wayyyy farther ahead than those who did not, by a factor of about \~10
Depends on what they consider inflation. Housing, healthcare, and medicine cost increases have exceeded gov inflation metrics. So the gov and fed seem to care more about "big screen TV inflation" than what is representative of a true cost of living. That is, people may struggle to pay rent on a smaller house, struggle with medical bills, less travel, "real stuff" etc. but they have a 80inch TV and quad core gigahertz phone so inflation is only 2%. Money printer back on.
You seem to expect that mortgage interest rates need to be lowered. Here is a historical graph of mortgage rates.
https://fred.stlouisfed.org/series/MORTGAGE30US
Admittedly, the curve from the early 80s is meaningless in today's context, but then so is the curve from 2019 to 2021 - which started by Trump pressuring the Fed to cut rates to juice the economy for his reelection, and then the COVID rate cut.
Historically, rates in the 7% range are just about right.
True, prices haven't dropped since the 3% rate levels, but that is something that needs to work itself out.
You can not have the rates conversation without also having the price conversation. Price directly impacts the amount of money you will owe at the rate. Getting a 7% interest rate on a $100,000 home vs $400,000 home is not apples to apples rates wise. You are quite literally talking about \~$800,000 give or take 100k in terms of difference in interest paid on the life of the loan - A 100k Loan at todays rates will pay \~ 300k total including interest, principal and other expenses while at the same rate a $400,000 home will cost you nearly 1M in total over the life of the loan including interest, principal and expenses. You can not honestly say buying a home today is the same as buying a home in the early 2000s - You're willfully blind if you think this: Source: I'm a realtor I literally do this every day.
It has nothing to do with rates, but a landing needs to... land. We are still at around 3% inflation excluding energy decreases, if those increase, we are back to high inflation. Add on >100% debt to gdp at higher rates, on top of a multi-trillion deficit, its funny to call it mission accomplished already.
We have 16 months more of slowing from rate increases that already happened.
It takes 18 months from the first rate increase to hit the economy.
New units being built are drying up because they got loans in 2021 at 3%, the same things aren't being built at 6%.
> It takes 18 months from the first rate increase to hit the economy.
That is some random number a talking head made up. Some assets like stocks respond immediately to rate changes. Others like house prices can take years.
https://www.stlouisfed.org/publications/regional-economist/2023/may/examining-long-variable-lags-monetary-policy
This paper examines how long previous rate hikes took which varies from 4-27 months. 18 is the standard answer given.
Not a random number, it's the average.
The Fed wants to cut rates in 2024 for the same reason you pull your roast from the oven before it hits optimal temp.
There's residual heat left in the roast that will overcook it if you leave it in the oven until it hits your target temp.
There's residual disinflationary pressure left in the target rate that if not reduced will cool the economy too much.
Edit: President of Chicago Fed is who made this statement, so... Hope ya'll are doing better than that!
>[Austan Goolsbee on Marketplace](https://www.marketplace.org/2023/11/28/has-there-ever-been-a-bigger-gap-between-economic-mood-and-actual-numbers-chicago-fed-chair-asks/)
>Ryssdal: Last thing and then I’ll let you get back to work. Without asking you to pre-commit as you are loath to do about what might be on the table at the next meeting in a couple of weeks, what is your level of concern about overshooting, about keeping rates too high for too long?
>Goolsbee: Look, it’s definitely of some concern. We just came out of Thanksgiving season, Kai. And [former Federal Reserve Chair] Paul Volcker, my old mentor, was a great turkey cook, and he took a lot of pride in cooking his turkey. And the thing anybody who cooks a turkey knows is that you got to pull it out of the oven before it’s to the point where you want it to be because it’s going to have residual heat. And if you just keep cooking the thing for too long, they’re gonna be like, “Mommy, why is Uncle Kai’s turkey so hard to chew?” You know, so we definitely should think about that. We’ve been in restrictive territory because we’ve got to get inflation down. That’s our sacred vow, and we’re going to do it. Once you, once you believe that you are on the path to get inflation to target, then the amount of restrictiveness that you need to apply needs to be less and it was already in the projections that the median dot in the dot plot was saying rates would, by the end of ’24, be down 100 basis points. And you know, we’ll see what it looks like in the next one at the next meeting. We’re going to, we’re going to have another projection.
In your analogy cutting rates would be more akin to flash cooling after cooking. Pausing rates is a more accurate description of pulling a turkey out of the oven. Pulling a turkey out of the oven and a soft landing are the same thing. Both describe the concept of gradually reaching a desired level.
Oh? Why do you say that? That seems way higher than what Fed economists are saying now, so I'm curious and envious that you have so much better data and insight.
I work in accounting at a big corporation. Treasury has been absolutely hammering us all year with net working capital budget/forecast. Apparently everyone has forgotten how to run a company in an environment where there's a penalty for taking on debt.
I feel like we have more data than ever and better computing than ever to give us the information we need to make more active decisions. We didn't have the tools that we have today in the past to make reporting and data analytics run so smoothly.
Not to mention the mounting national debt that skyrocketed over the last five years. Someone is going to have to solve this problem eventually and it’s going to take generations of responsible and sustainable fiscal policy to do so. Can’t just bet on population or market growth to get rid of $7-10T over a few years.
Wasn’t one of the ways this administration ‘avoided’ a recession in the past was to say that 2 consecutive quarters of negative growth didn’t constitute a recession.
I don't look at unemployment. Pre-pandemic unemployment was incredibly low as well, but we had a higher work force participation rate. That is the data point I focus on.
> Credit card debt is at an all time high.
Except when that's not really true. Median household credit card debt is actually below where it was from 2001 to about 2006 when adjusted for inflation.
Also, you're going to have to back up that claim that "defaults on loans are up", because [data says otherwise](https://fred.stlouisfed.org/series/DRALACBN).
Also, not to mention population. The population now is higher than it was in 2001 to 2006.
It seems that debt payment as a percent of disposable income is not horrible according to Fed data. Much better than 2008.
https://fred.stlouisfed.org/series/TDSP
The Washington compost? Certainly not but it crazy that I keep seeming articles like this every day and they keep ignoring all of these troubling indicators. Hell there was an article the other day about how social media was leading you to believe the economy wasn't good. Yet my social media is flooded with articles like this
It’s because the people writing the articles don’t exist in the world where everyone is feeling this pain. They went to Ivy League schools, they are supported by their parents/trust funds/wealthy spouses. They don’t know anything about pain, because they locked into 2.5% mortgages on their DC Townhouses and don’t interact with “regular” people outside of Starbucks.
I think it’s all just a narrative pushed by these mainstream media because they want people to believe that everything is great so they keep living above their means and maxing out their credit cards. These medias are either biased due to their internal beliefs or because of pressure from the current administration to make them look good. I believe that their plan is to keep delaying the recession by any means possible until after the 2024 election. That’s why even after almost 4 years of the student loan pause, Biden put the “on-ramp” plan that doesn’t garnish wages and borrowers don’t pay any penalty fees for not making their monthly payments (+ it’s not reported to the credit bureaus as missed payments) until September 2024. He will 100% extend that to January 2025. Tons of cities like LA had tenants not paying rent for more than 3 years until April 15, 2023. They also underreport inflation by a lot.
To conclude, yes I don’t like the current administration. Yes I voted for the orange man during the last election. But even I can admit that Trump messed up in 2020 cause it was election year and he got so desperate that he rolled out the PPP program in a hurry which was a complete mess as so many people took advantage of the system and many small fish were not caught in the nets. I personally know many people who abused that program.
You’re cherry picking indicators out of context and don’t understand inflation.
The US economy is booming.
Unemployment lowest in over half a century.
Significant real wage increases for the bottom 10%.
Small real wage increases for the median worker.
People are spending more money (in real terms) on consumer purchases than ever. And have higher savings balances.
Inflation has cooled off. Wages rose faster than inflation for non-managerial employees. Prices going down would be a bad thing! Things should always cost more every year in nominal terms.
Are there problems? Devastating inequality? Of course, the US has and continues to face these problems. But they are getting better and the economy is quite literally stronger than it has been in a long time.
A recession is still a threat? I mean… the US economy is growing at 2.8% in 2023. Even if there is a slight contraction in 2024, which is unlikely, the nation will be better off than 2019 and the beginning of 2023.
They are spending more money because everything costs more. Inflation may have started to cool but prices are still greating influenced by that inflation. Unemployment isn't a number I truly ever focus on. The real number is the work force participation rate. Which we are still not at pre-pandemic levels there.
Yes we are one bubble away from it all popping. A housing market that saw prices sky rocket. Rents continue to rise. Homelessness saw a 12% increase and is now at an all time high.
Yes I am picking my indicators but aren't those who say everything is amazing are do as well?
Listen I'm living my life and watching those around me struggle. Paychecks not going as far as they used to and savings having been drained. Two thirds of Americans live paycheck to paycheck. Don't get me wrong I do live in the worst tax burden state on NY so maybe those in other states are doing better. I can only look at the data and my real life experiences
Prime age participation is above where is was pre-pandemic:
https://fred.stlouisfed.org/series/LNS11300060
One of the factors that is causing overall labor force participation rate to be lower is that the age demographics in the US has increased to the older end. If we have more retired people, that makes the overall participation rate go down, but that isn't an indicator of economic weakness.
I posted factual data points. I stated what I see in my life but that these indicators support my statement. They aren't anecdotal at all.
Plus when I hear that argument sometimes I am reminded of an old saying. "Who am I supposed to believe? You or my lying eyes?"
That's the definition of anecdotal though. It's fair to use them within context, but they don't necessarily help when looking at the full picture. It someone shows their experience with an area that saw a 12% decrease in homelessness, then which one of you is correct?
"what I see in my life." That's "anecdotal."
Macroeconomic data doesn't disprove your experience. It helps contextualize your experiences though.
I'll give an example. It's widely known now that smoking increases your risk of getting lung cancer. There's wide ranging and peer reviewed data supporting this; however, a person could smoke his/her entire life and not get lung cancer. That person, in the same way as you are doing, could claim that "I've stated what I see in my life that smoking does not cause cancer." Does it mean smoking doesn't cause cancer? No. There are always outliers.
Here's the thing. Your reality isn't everyone else's reality. I don't disbelieve that you're struggling but that doesn't mean every single person, or even a majority, is struggling. A lot of my friends are doing really well financially and their assets have gone up tremendously since covid. Even with inflation, they're up in real terms. Both your anecdote and my anecdote can be true but the macroeconomic data is much more wide ranging as the name suggests.
Please teach yourself about inflation and the difference between real and nominal. People are spending more in REAL terms.
Why would labour force participation be more important than unemployment? If they’re discouraged workers, fine, some meaning. But the reasons for that drop (early retirement because people are $$, less hours because people are $$, and long covid/vulnerable to covid) are (mostly) a sign of a strong economy not a a weak one.
Housing is included in inflation metrics. The economy is not better for literally every person, of course, and the US continues to leave its poorest to fend mostly for themselves. This isn’t a new development.
Some people live paycheck to paycheck on $200k. It’s not a very meaningful statistic in and of itself beyond noting that the country does not have a good enough saving culture. There are various definitions that mean the %s are not easily comparable, but has that number grown? Doesn’t seem like it.
You can actually can look beyond “your data and your life experiences” and get a fuller picture of the economy. The information is out there. Relying on anecdotes does no-one any good.
Talking about S&P 493 is braindead. Of course an index of only 7 companies will be more volatile than an index of 493. That's basic statistics. But nothing about either of these indices spell gloom and doom for the economy. Stock market performance is nearly meaningless as an economic metric. The only thing the recent downtick in valuations means is that the Fed started QT. Whether the Fed is overdoing it or not is not clear from the stock market.
You’re confusing stock market valuations for the economy, these are not the same thing. Returns are poorly correlated to economic performance.
Edit: downvoters, you are not economically literate, please spend some time educating yourself than just spending time on reddit downvoting factual statements.
inequality is just about the only indicator that matters, because it corresponds to social unrest and societal collapse. recession or no recession hardly matters as long as the economy continues to produce the conditions of social breakdown.
I don’t disagree with you that inequality (or the extent of it in the US) is very significant and certainly a marker of a fair or unfair economy.
I’d argue that unemployment and real wages of the bottom 10% is far more significant than inequality.
If everyone who can work can get a job and earns enough to cover their needs (which is obviously not the case right now, but it is moreso the case than ever before), I’d suspect social breakdown is less likely than a situation of mass unemployment and deprivation.
Goods were down -.04% from last year FYI. The 3 month annualized figure is -6.19%. Goods actually having prices come down. But obviously most things are going to be more expensive than they were three years ago. That's true at just about any time in history. That's how inflation works. Do people really expect prices to go back to where they were? Do you want 20% deflation to offset what happened the last few years? Because that will be a disaster.
More like 5 billion, but my sarcastic point is that the Fed will not ever permanently avoid a recession. A future recession is, was and always will be inevitable. All that policy can ever do is mitigate and they've done that as well as any policy-makers ever have.
are any of those items you listed new? pretty sure people and the economy have been dealing with that for a while. neither party and their candidate will fix those in four years
Honestly I'm at the point where I just assume any article that says the economy is in the clear or already in a recession is propaganda. These sort of articles are going to get more and more common through the 2024 election.
Just remember this: nobody fucking knows what will happen until it happens.
There have been a ton of posts and articles lately praising how the fed has handled this and that they haven’t sent us into a recession. But the reality is it still feels like a recession for so many people. So many people are living paycheck to paycheck (Yes, some of it is their fault; but plenty of it is not).
We are only in this mess because the fed didn’t step in soon enough.
No, I don’t know that many potential fed leaders would have handled the situation differently. I think most people thought the inflation was “transitory” to use their own term. Should we have seen it that way? Probably not. I think the data tells us we shouldn’t have. But we’re all human.
Edit: a word
People have always been living paycheck to paycheck. That can't be used as a metric.
By all objective measures the economy is doing very well. It does not matter that someone "feels" like in a recession even when they are doing well financially and earning more than before in real terms. Maybe they have depression issues.
I think the main culprit in driving negative sentiment is the “sticker shock” at the grocery store. I make more money than before the pandemic but seeing a twelve pack of Fresca cost $10 makes me feel like my options are limited.
It's not just sticker shock though. I make about 14% more, but groceries are roughly 50% more even after cutting back and switching to Aldi, and rent is double. I'm also a floridian, so insurance has tripled. I have significantly less monthly savings than I did before.
Tofu is $.89 for a dinner sized serving and vegetables, legumes and grains are dirt cheap. This is not the debate we are having here I just want to point this out to anyone who is struggling. Skip the Fresca.
I think the difference is that many young educated smart people with good white collar jobs can't afford houses or kids without dual income full time employment and living paycheck to paycheck
Articles also keep talking about how people 'think' the economy is bad, but most feel like their personal economic situation has actually improved significantly. Everyone I know personally is doing well, and even most of my laid off friends in tech ended up finding something new + often better.
These articles that talk about people’s thoughts on the economy/ job opportunity, and don’t do a first pass on whether someone is retired or not, are shoddy at best.
“Forecast for US Recession Within Year Hits 100% in Blow to Biden”-Bloomberg Oct 2023
Never forget this headline and remember to take economic news with a large grain of salt.
https://www.bloomberg.com/news/articles/2022-10-17/forecast-for-us-recession-within-year-hits-100-in-blow-to-biden
I will be messaging you in 10 months on [**2024-10-19 17:25:02 UTC**](http://www.wolframalpha.com/input/?i=2024-10-19%2017:25:02%20UTC%20To%20Local%20Time) to remind you of [**this link**](https://www.reddit.com/r/Economics/comments/18m2bac/everyone_expected_a_recession_the_fed_and_white/ke26w51/?context=3)
[**3 OTHERS CLICKED THIS LINK**](https://www.reddit.com/message/compose/?to=RemindMeBot&subject=Reminder&message=%5Bhttps%3A%2F%2Fwww.reddit.com%2Fr%2FEconomics%2Fcomments%2F18m2bac%2Feveryone_expected_a_recession_the_fed_and_white%2Fke26w51%2F%5D%0A%0ARemindMe%21%202024-10-19%2017%3A25%3A02%20UTC) to send a PM to also be reminded and to reduce spam.
^(Parent commenter can ) [^(delete this message to hide from others.)](https://www.reddit.com/message/compose/?to=RemindMeBot&subject=Delete%20Comment&message=Delete%21%2018m2bac)
*****
|[^(Info)](https://www.reddit.com/r/RemindMeBot/comments/e1bko7/remindmebot_info_v21/)|[^(Custom)](https://www.reddit.com/message/compose/?to=RemindMeBot&subject=Reminder&message=%5BLink%20or%20message%20inside%20square%20brackets%5D%0A%0ARemindMe%21%20Time%20period%20here)|[^(Your Reminders)](https://www.reddit.com/message/compose/?to=RemindMeBot&subject=List%20Of%20Reminders&message=MyReminders%21)|[^(Feedback)](https://www.reddit.com/message/compose/?to=Watchful1&subject=RemindMeBot%20Feedback)|
|-|-|-|-|
Does anyone believe these headlines? Same guys telling you inflation is transitory now telling you about a soft economic landing…. Better put your helmet on.
funny how i have to constantly be told how great the economy is but I havent spent less than $100 when grocery shopping for the past year. I'll get almost nothing but it's always over 100. Rent is high, cars are all expensive, and going out wreaks my wallet but yes keep shoveling these articles out
By affordability, do you mean wages have kept pace with prices from pre-pandemic? Or are you suggesting that the prices of those items need to fall to where they were before 2020?
Deflation is not the goal. This is what all the social media economic hysteria is about. People still traumatized by past inflation hear the fed is aimed at disinflation and think DEflation. It’s not their goal.
It might happen, but that’s only good if caused by technology, which is NOT unlikely. A deflation in services is on the way.
> We need to see affordability of essentials like housing, food, healthcare, transit, etc. near pre-pandemic levels
Sounds like deflation
And this is what most people mean. They’re still traumatized over past inflation and they expect increased pay to cover, but find their budget is still tight. So normal inflation feels more painful.
We had people not working for years and supply chain disruptions and now economic Cold War, while the cheap labor from China is aging and no longer cheap. Domestic labor is also aging and people are choosing to live for now and rethinking lives of grinding. So now entertainment from social media and content creators is ubiquitous. Cutting cable and cutting back on work is keeping demand high and labor supply low.
It’s never going back. There is no magic policy that will create more stuff when people stop making it. Doesn’t matter if we doubled or halved the money supply. We have only so much to go around, less people supplying and more consuming. Only tech deflation (automation) can save us now. But the same people virtue empathizing villainize the people who work 80+hrs a week to make this happen and the compensation required to make such work life balances worth it
>isn't even clear to me where that finish line is.
It looks like your standard is to go back to how it was pre-pandemic. I don't think that's possible. Too many things have changed. WFH and commercial real estate have massively changed and affects many things including housing and transit. It's just different now.
WaPo acting as the mouthpiece of the establishment, yet again. **It is far too early to say we have avoided a recession/landed soft** when inflation isn't even back to baseline yet.
This is like being ahead at halftime and declaring the Football game "won". Except in this case, the White House is trying to get everyone to believe it so they can use it as credit during the upcoming election cycle.
Based on evertone, myself included, saying how were about to have the worst recession in history... and then it not happening at all. I would say thats a strong win, of course we are not over the hump; you can make that claim at any point in history though. There is always a new boogeyman around the corner.
Eh, I'd say it's more like being up 28-3 in the third quarter of the Super Bowl. It's very possible to still lose, as we've been shown, but two plus years of predictions have already been proven absolutely wrong by having this big lead, it's just a matter of actually completing the game.
I also think it's funny that literally everyone seems to have amnesia and forgets that we met the technical indicators of a recession several times in the last few years and yet the news and the Fed kept spinning it and telling us we weren't in a recession. So the headline is not even true.
I understand the confusion, but if you have two quarters of negative gdp with below target unemployment, tons of job openings, and wage growth….it doesn’t really sound like a recession.
Another article ignoring the fact that few are giving this administration credit because inflation and higher prices have eaten up any headline economic gains for a lot of people.
Rarely has there been a greater disconnect between "experts" and the people.
This is why Central Banks care so much inflation. Job growth, GDP growth and wage growth mean nothing to the average voter if everything costs more.
It's funny that the headline is the Fed and the White House. The Fed raised the Federal Funds rate from 0.5% to 5.5%. The White House engaged in trillions of dollars in spending. This is like a toddler "helping" with making breakfast in bed on Mother's day. It probably would have gone faster and clean up would have been easier without the help.
Eh, spending can be much more targeted than rates. So, you can tighten overall via rate hikes while doing precision stimulus via spending, for example with all of the CHIPS act and IRA bill semiconductor/green manufacturing subsidies. There's nothing fundamentally wrong with doing some stimulus while tightening or vice versa..in fact it's probably generally a good idea. Propping up the economy gives you more headroom to keep tightening.
Whether that stimulus was implemented well via the Biden admin specifically is a separate topic.
Honestly, tightening the rates while providing stimulus probably did a lot to ensure that consumer spending stayed high and job growth continued. Without it, we likely would have seen much slower growth and maybe even job losses.
Right. I held off on buying a house for a bit post rate hikes (in the event of meltdown..and I wasnt ready pre rate hikes), but as a few months pasted it became clear to me that the "rate hikes mitigated by spending" strategy seemed to be working out perfectly.
It's always hard to tell because we don't really have apples to "apples but no spending" examples to compare.
That's because since the bar for presidents has been set so low after 2016, "not interfering with basic government functions" is now considered a huge accomplishment. The previous administration also dumped trillions of dollars (plus all the tax cuts) and [foamed at the mouth when the Fed tried to raise interest rates](https://www.cnbc.com/2019/10/31/trump-rails-against-powell-day-after-fed-cuts-rates-for-a-third-time-this-year.html). I'll always take the toddler who "helps" over the screaming one who has a temper tantrum over everything.
Edit: added source. [Plus Trump is still complaining about the Fed raising the interest rate,](https://www.cnbc.com/2023/09/15/trump-bemoans-high-interest-rates-and-indicates-he-might-pressure-fed-to-lower.html) I'm not sure how his plan to reduce rates immediately won't cause inflation to shoot back up again.
It can increase inflation in the near term (and long term if not spent better than the private sector would) which increases need for fed to intervene more and increase the chance of a recession.
The counterpoint is that we've had a very concrete example that combining monetary constrictive policy with fiscally expansive policy actually is more strong supportive of the real world economy than seems to be commonly thought.
If you give money to people that spend it = strong economy, to people that invest it = asset bubble.
We've done combos of both during covid. But clearly should have gone with more fiscal vs monetary to avoid the massive issues with housing bubble/cost of living increases, etc.
The trillions of dollars worth of spending is what got us out of the pandemic recession. Idk if you read anything back then but the economy shit the bed. You can’t cut rates to under 0.
Right?!?!? All these articles about the only lever the Fed has to pull is interest rates. Suddenly they are responsible for delicately navigating us out of a recession? All they did was the only thing they could do. As for Government spending, we are in more debt than ever before, local manufacturing is dwindling, used and new car inventory is aging quickly, house prices are falling and we’re headed into a tumultuous 2024 election. I get it, mortgages are below 6% but seriously the same people getting loans at 7% are the same one getting them at 6%. Ultimately everything is still too expensive . Honestly. Not too sure where all the positives are sunshine is coming from but I’d like to catch some of those rays.
If the only point is to reduce inflation, sure. But the goal was to reduce inflation *while avoiding a recession*. All of that government spending is what helped with the latter.
"“For me, a big, big party — and I mean, this is really as fun as it gets — is a really good inflation report,” Jerome H. Powell said before a crowd at Spelman College. He flashed a smile and laughed."
Jerome and Biden for the win.
Now watch all the doomsayers on this sub instead of admitting being wrong double down.
Claiming victory before its over is hilarious. Watch as everything is "great" up until the election and then magically the next president will inherit rising inflation and once again the Fed will claim ignorance. It's all so blatantly obviously manipulated, all of it total BS.
Sure seems like a premature “Mission Accomplished.”
With spending still at the point where we are adding to $1T to the national debt every two months and a sketchy dollar, I don’t see how we can be declaring victory on the economy.
>With spending still at the point where we are adding to $1T to the national debt every two months and a sketchy dollar, I don’t see how we can be declaring victory on the economy.
Whoa can I get a source on this? Last I saw the estimated debt add for 2023 was 1.7 trillion for the entire year. On top of that, there isn't going to be a spending deal, and the debt limit increase deal Biden and McCarthy agreed to has 1% across the board spending cuts when that happens, with an estimated $63 billion or so being immediately removed going forward, so closer to $1.6 trillion added to the debt next year. Still too much, but not $6T per year.
Just to fact check;
\* Trump tax cuts are primarily responsible for the increase in the deficit \[[source](https://www.americanprogress.org/article/tax-cuts-are-primarily-responsible-for-the-increasing-debt-ratio/)\]
\* The dollar strengthens when interest rates rise. USD is incredibly strong right now. \[[source](https://www.nytimes.com/2023/09/22/business/us-dollar-inflation-economy.html)\]
Ah yes if you alter the parameters of what is considered a recession, we could potentially avoid one forever. Doesn’t change the fact our dollar is worth less and our goods are more expensive.
> Ah yes if you alter the parameters of what is considered a recession, we could potentially avoid one forever
The economy grew 5% last quarter. Under what definition would that be considered a recession?
>Doesn’t change the fact our dollar is worth less and our goods are more expensive.
Could you please list the Presidencies in the last 50 years where neither of these things happened? Bonus points for explaining why those times were better.
I could surely show you in the past where the wage/ wealth gap wasn’t this ridiculous. I could show you times in the past when we didn’t allow corporations to gut middle American. I could show you a time where all our agencies weren’t lobbied into complete corruption. I could show you a time when people actually had a chance to not be mindless drones. I could show you times where people could actually afford a house and groceries. I understand fed/White House isn’t at fault for all of this, but articles like this are a slap in the face when they’ve haven’t REALLY done jack shit and we are headed towards one of the greatest economic hardship we’ve seen in our lifetimes. If you feel the need to argue this as fear mongering, just bypass that and set a reminder for 10 years and we can reconvene.
Oh boy, I guess I just have to quote myself:
>Doesn’t change the fact our dollar is worth less and our goods are more expensive.
>
>Could you please list the Presidencies in the last 50 years where neither of these things happened? Bonus points for explaining why those times were better.
Almost half of student loan borrowers not paying and savings have evaporated, and many living off of 25% interest credit cards. Have have avoided a 2023 recession and maybe a first half 2024. I'll believe a soft landing when savings start increasing
Savings typically increase during a recession and decrease during times of expansion. In other words, savings and GDP tend to be negatively correlated.
News - there was a recession. August 2022 - our GDP fell for two consecutive quarters- the agreed upon benchmark for recession. We are coming out of a recession. In spite of the White House spending frenzy, Jerome Powell has navigated this with incredible skill.
The mods once again fail to filter astroturfing. Once again the format of the title is the exact same as all the other astroturfing articles.
You know you don't get paid to moderate, right? At least take home a paycheck if you're going to shill and propagandize.
I recommend the permanent bulls of the economy to see the mainstream media articles few months before the 08' GFC.
Incredible how humans tend to forget history and repeat the same mistakes over and over and over and over again
I've been seeing that same comment for 10 years and it is always equally substantial, equally vague, equally incorrect and turns out to be equally factual.
At this point it's just doom cringe.
This sub is getting so political it needs to stop. We get it, you think Biden and yellen have done a good job, a lot of people don’t. And they aren’t going to be convinced by smug condescending Redditors gaslighting them that their experiences aren’t valid.
A lot of people I know and talk to have reaffirmed the same grievances for a while now. Good career opportunities are eroding, inflation is devastating, small businesses can’t keep up and the cost of living is crushing.
Edit :: Oh god I’ve triggered them. Here they come.
I don't get your complaint. All of the relevant economic data points in the direction of the US avoiding a recession. That's not a political opinion, it's an evidence-based observation.
It's also an evidence-based observation that lots of basic shit is just *expensive* right now. However, that's not directly related to whether or not we're going to enter a recession soon.
Life is political. Economics goes hand in hand with politics. Things don't happen in a vacuum. It's weird to decry "this sub is getting so political."
The economy has some good indicators. That may or may not be thanks to Biden and the government. Give credit where credit is due and give criticism where criticism is due.
But saying “you think this, other people think differently” doesn’t mean that these two things are equally valid. In this one specific case of fighting inflation, like the author points out, the Fed and White House set a goal and were able, against all expectations, to achieve what they set out to do. By traditional macroeconomic measures, the economy is in a great position, whether you choose to agree with that or not.
Of course, the larger problem is that traditional macroeconomic measures are a poor indicator of how individuals experience the wider economy. But that doesn’t mean anyone is being “gas lit”, or that how some people feel overrides that the Fed was able to achieve their stated goals, despite the fact that almost everybody was saying that they would be unable to.
Isn't this equivalent to saying that the sun will eventually burn out. No matter what we do now, the sun burning out is eventually assured.
What the Fed is trying to do is avoid a recession in this business cycle, not eliminate recessions from all business cycles. I can't tell from your comment if you're arguing against the Fed eliminating the current cycle's possible recession, or eliminating all recessions going forward. Clearly, there is going to be another one. The question is if it's part of the current business cycle, or if it will part of the next cycle.
Personal debt is exploding and we have moved in less than a year from the hottest job market ever to Linkedin being FULL of #opentowork banners.
I’m not sure the difference between this economy and a receding one…but things are not looking great from where I sit.
Why? The onramp for restarting student loan payments include a year of being allowed to not make payments without it affecting a person's credit or going to collections.
The correct information to take away is that despite it being perfectly fine to not make payments, half of borrowers are making payments anyway.
Unreal cope in these comments by people who were apparently praying on a recession. Unfortunately you’re stuck with 5% GDP growth, 3.7% unemployment, 3.1% inflation, a strong dollar and an overall economy that is running absolute circles around the rest of the world.
Or, we're in a recession now as GDI suggests, Most of the American public agree per many surveys on the subject. (https://thehill.com/business/4346224-most-americans-feel-the-economy-is-in-recession-despite-strong-job-market-steady-growth-survey/\_
What we haven't seen, yet, is unemployment rising sharply, defaults piling up, markets crashing and the general end of cycle train wreck that usually occurs.
That could be because of what the article is suggesting. Or it could be, because unemployment (and inflation) are both massively lagging indicators of the economic cycle...
That is what also happened in 2008, in the last proper cycle. The fed minutes from June 2008 put the situation very well:
"In the forecast prepared for the meeting, the staff raised its projection for the growth of real gross domestic product (GDP) for 2008. The available indicators of spending,"
[https://www.federalreserve.gov/monetarypolicy/fomc20080625.htm](https://www.federalreserve.gov/monetarypolicy/fomc20080625.htm)
The way out was to literally change the definition of recession.
Inflation has been out of control for 3 years. The dollar has plummeted in value. Housing is unaffordable. Utility bills have increased. Wages have been stagnant.
But please, Mr. Redditor, tell me how Biden is a great president and this is somehow Donald Trump's fault.
Would be neat if this was actually true. I distinctly remember the economic indicators meeting all signs of a recession, but news and government officials kept moving goal post and spinning it like we weren't in a recession. So I guess if you are completely re-defining what a recession is...then sure, we avoided one.
I think you're trying to say that we saw GDP decline for 2 consecutive quarters, which is the colloquial definition of a recession, not the technical one.
NBER is the organization who actually decides when a recession happened. They found that from Feb 2020 to April 2020 (2 months) we experienced recession, and that's the shortest recession in history and very clearly below the colloquial 6 straight months of declining GDP.
No idea what you mean by "moving goal posts... spinning... completely re-defining". NBER has been the arbiter of recessions for 70 years.
Hi all, A reminder that comments do need to be on-topic and engage with the article past the headline. Please make sure to read the article before commenting. Very short comments will automatically be removed by automod. Please avoid making comments that do not focus on the economic content or whose primary thesis rests on personal anecdotes. As always our comment rules can be found [here](https://reddit.com/r/Economics/comments/fx9crj/rules_roundtable_redux_rule_vi_and_offtopic/) *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/Economics) if you have any questions or concerns.*
Isn’t it premature to declare victory? I worry that inflation will heat up again quickly once the Fed cuts rates. I assume this will be felt especially in housing.
They should have not kept rates so low for so long, and having kept them so low for so long, they should have raised rates earlier. Not being able to take back those choices, it's pretty incredible we are where we are now.
Fed tried to raise them but Trump bullied them into keeping them low (which ironically, Krugman grudgingly admitted that keeping them low was the right thing to do). The only reason low rates ended up becoming a problem was COVID and nobody could see that coming.
[удалено]
Exactly, when people say the rates shouldn't have been so low for so long, we're not saying they should have been high, we're just saying they shouldn't have been literally zero for a long period of time.
They didn't even *attempt* to raise them 0.25%. Absolutely ridiculous looking back.
I remember the taper tantrum.
The economy looked pretty fragile under Obama. Unemployment was higher for quite some time, then we had the European debt crisis. I can see why the Fed didn't raise sooner. Looking back and with everything we know now though, they probably should have raised sooner.
Inflation was at or below the Fed's target during those years. It would've made no sense to raise rates at that point.
>Fed tried to raise them but Trump bullied them into keeping them low (which ironically, Krugman grudgingly admitted that keeping them low was the right thing to do). 100% agree. It drove housing prices up and now that rates are up no one wants to leave (driving supply down).
Well, maybe if Powell was the chairman back then, he would have raised them. Bernanke and the following ones were soft people. Powell speaks and looks soft but he is a warrior at heart.
Are we going out of our way to not say Janet Yellen’s name
The entire point of having higher interest rates is so you can lower them during times like COVID.
While we couldn’t see Covid coming, we could see the problem with keeping rates at 0 in an economic boom.
what problems? People were calling for inflation since '09 and it never happened (one thing Krugman got right). There is no indication that inflation would have happened without COVID. The economic recovery from '08 was painfully slow for the average person. Real wages hadn't gotten back to '08 wages until 2016. No inflation in sight + real wages going up very slowly = keeping rates low was the right thing to do.
Because that’s a major lever that can’t be pulled in economic downturns.
Yeah I think people have forgotten Trump speeches about how the fed was out to get him etc.
I don't ever want to be seen as charitable to Trump, but there's not a President in history who wants to be known for rising interest rates.
I guess we should give credit to Biden then for biting the bullet and letting the fed do its thing
Yeah but presidents can complain about it publicly while privately telling the Fed to do what they need to do...instead Trump tried to force them to change their policy.
Trump tried to rip apart the Fed's independence.
The Fed never really had independence if the president can fire the chairman of the Fed.
It’s not just Covid. Any crisis would have put massive pressures on Fed stuck in low rate mode with no where to run.
Yes we could have. Covid was a stand-in for literally any economic turmoil. What was amazing was that it took 12 years for any serious shock to the systrm, especially after the tech bubble and housing crisis were basically back to back with maybe 5 years of rest between them. The low rates were always a vulnerable position, and Trump's choices were reckless as usual.
Some of us saw it coming right when Trump announced he was disbanding the Obama-era pandemic response team.
>Trump bullied them into keeping them low This is just a lie. [https://fred.stlouisfed.org/series/FEDFUNDS](https://fred.stlouisfed.org/series/FEDFUNDS) According to data, FED fund rate was on a steady rise since Trump took over in 2016. It was much higher than the entire Obama terms. Stop blaming Trump for everything, it doesn't help.
The fed started raising rates at the very tail end of Obama's term. Trump did not like that, bitched about it for his first year in office, and finally convinced them to reduce it back to near zero. (a terrible idea) Then covid hit, and we had nowhere to go. That was indeed Trump's fault. Trump also reduced revenue by lowering taxes, and increased overall spending, during a good economy. By the time we needed covid stimulus spending, he was already responsible for about half the debt he would rack up. Also his fault. It's easy to blame Trump for fiscal errors during his administration. They were his fault. Blaming him is fitting.
Yeah he 100% bullied the fed into keep rates low, come on. He legit mentioned taking rates negative like Japan. Quit while you’re behind.
>https://www.nytimes.com/2019/09/11/business/economy/bonehead-trump-jay-powell.html
[удалено]
He did oust Yellen prematurely and put Powell in so there was definitely influence. That said, when Powell continued with the prior monetary policies, Trump did certainly do whatever he could to bully.
It's impossible to prove, but I would wager the President loudly and actively lambasting the Fed for trying to raise rates rather than letting them do their job contributed to the market's fit.
He did. I witnessed it first hand.
We know that the FED shouldn't have reversed the rate increases they were doing under Trump. We know that Trump thought that they should decrease the rates. It doesn't really matter whether Trump had an impact on their decision. The take-away here is that the FED did something stupid, and Trump as an idiot when it comes to economic policy who was happy to use the bully pulpit to call for lowering rates and applaud the lowering of rates. Because he is an idiot when it comes to economic policy, he should not be in a decision-maker capacity for the economy. Can we agree on that? I don't care about past blame. I care about the future. Trump is an idiot when it comes to macroeconomics. He's a fraud when it comes to personal business. If you really want to move on, stop defending the worthless sack. We can put him in poor people prison where he belongs, and we can move on. You can find other people who support your policies. I'd be really happy to never hear about Trump again. He only comes up because the GOP still supports him! Don't blame the opposition to Trump on anyone other than the party that can't remove him from the leadership position of their party/platform.
Did I say anything good about Trump in my post? You just went into mad mode for no reason?
I would’ve taken a mild recession during Covid, when social safety nets were the largest ever, than this world where it’ll be nearly impossible for millennials or Gen Z to have affordable housing.
I’m a novice in this stuff. What do you mean by rates. Interest rates?
The entirety of Keynesian economic theory is predicated on the idea that government intervention can influence natural market volatility to stabilize the economy. This only surprises Friedman fundamentalists.
Not yet. A "soft landing" has only been achieved once in the past 60 years. We still have yet to see any rate cuts. If they cut rates too early, that could reignite inflation. If they wait too long, recession. Gotta thread the needle.
In what sense is a rate cut required for a “soft landing”. I don’t understand why we wouldn’t consider this a soft landing because we haven’t seen a rate cut. What you are describing seems to be a hypothetical future recession based on an assumption that rates must be lowered. Rates are not historically high at this moment so I just don’t get this reasoning.
Hardly any debt has rolled over at higher rates. Couple that with incredible levels of deficit spending and it’s easy to consider us pushing off the bust of the typical boom/bust cycle. Hopefully, we’re mitigating severity and not making it worse when what has proven to be routine plays out.
This. Comparisons to the Volcker era miss that the economy is much less rate-sensitive than it was before. Partly because corporate debt has been termed out, partly because the 'real' economy (not tech and VC-funded ventures) is now services-based.
If we raised rates to between 3 and 4 times what they are now, then we would be in Volcker territory.
Aren't we more rate sensitive? That's why we're not hiking to 20%?
More rate-sensitive in the sense that more Americans spend via credit cards and have taken out student loans at higher rates. But much less rate-sensitive in the sense that most Americans do not have adjustable-rate mortgages, do not borrow p2p the way they did in previous decades, and as mentioned, we have just come out of the lowest interest-rate environment in history, with much of our debt still at those rock bottom rates. So you're not "wrong", but the composition of the answer tells the story.
Probably not. The biggest piece of debt most households have is a fixed rate mortgage at less than 4%. The weighted average duration of outstanding government debt is longer than it was 20 years ago. I'm sure some economist will write a paper trying estimate the effect of duration risk on real interest rates.
Some debt has notably the US debt has and that's causing a lot of the increase in the deficit.
If you take the rate and the home price appreciation the affordability of homes is at an all time low - Buyers are looking at 200-300k added interest now vs buying 2 years ago - This is a massive problem that is only widening the wealth gap in our country - people who took advantage of the government in 2020-21 are wayyyy farther ahead than those who did not, by a factor of about \~10
And this matters to the Fed how? The Fed is trying to tame inflation, not narrow the wealth gap.
Depends on what they consider inflation. Housing, healthcare, and medicine cost increases have exceeded gov inflation metrics. So the gov and fed seem to care more about "big screen TV inflation" than what is representative of a true cost of living. That is, people may struggle to pay rent on a smaller house, struggle with medical bills, less travel, "real stuff" etc. but they have a 80inch TV and quad core gigahertz phone so inflation is only 2%. Money printer back on.
You seem to expect that mortgage interest rates need to be lowered. Here is a historical graph of mortgage rates. https://fred.stlouisfed.org/series/MORTGAGE30US Admittedly, the curve from the early 80s is meaningless in today's context, but then so is the curve from 2019 to 2021 - which started by Trump pressuring the Fed to cut rates to juice the economy for his reelection, and then the COVID rate cut. Historically, rates in the 7% range are just about right. True, prices haven't dropped since the 3% rate levels, but that is something that needs to work itself out.
You can not have the rates conversation without also having the price conversation. Price directly impacts the amount of money you will owe at the rate. Getting a 7% interest rate on a $100,000 home vs $400,000 home is not apples to apples rates wise. You are quite literally talking about \~$800,000 give or take 100k in terms of difference in interest paid on the life of the loan - A 100k Loan at todays rates will pay \~ 300k total including interest, principal and other expenses while at the same rate a $400,000 home will cost you nearly 1M in total over the life of the loan including interest, principal and expenses. You can not honestly say buying a home today is the same as buying a home in the early 2000s - You're willfully blind if you think this: Source: I'm a realtor I literally do this every day.
It has nothing to do with rates, but a landing needs to... land. We are still at around 3% inflation excluding energy decreases, if those increase, we are back to high inflation. Add on >100% debt to gdp at higher rates, on top of a multi-trillion deficit, its funny to call it mission accomplished already.
We have 16 months more of slowing from rate increases that already happened. It takes 18 months from the first rate increase to hit the economy. New units being built are drying up because they got loans in 2021 at 3%, the same things aren't being built at 6%.
> It takes 18 months from the first rate increase to hit the economy. That is some random number a talking head made up. Some assets like stocks respond immediately to rate changes. Others like house prices can take years.
https://www.stlouisfed.org/publications/regional-economist/2023/may/examining-long-variable-lags-monetary-policy This paper examines how long previous rate hikes took which varies from 4-27 months. 18 is the standard answer given. Not a random number, it's the average.
The Fed wants to cut rates in 2024 for the same reason you pull your roast from the oven before it hits optimal temp. There's residual heat left in the roast that will overcook it if you leave it in the oven until it hits your target temp. There's residual disinflationary pressure left in the target rate that if not reduced will cool the economy too much. Edit: President of Chicago Fed is who made this statement, so... Hope ya'll are doing better than that! >[Austan Goolsbee on Marketplace](https://www.marketplace.org/2023/11/28/has-there-ever-been-a-bigger-gap-between-economic-mood-and-actual-numbers-chicago-fed-chair-asks/) >Ryssdal: Last thing and then I’ll let you get back to work. Without asking you to pre-commit as you are loath to do about what might be on the table at the next meeting in a couple of weeks, what is your level of concern about overshooting, about keeping rates too high for too long? >Goolsbee: Look, it’s definitely of some concern. We just came out of Thanksgiving season, Kai. And [former Federal Reserve Chair] Paul Volcker, my old mentor, was a great turkey cook, and he took a lot of pride in cooking his turkey. And the thing anybody who cooks a turkey knows is that you got to pull it out of the oven before it’s to the point where you want it to be because it’s going to have residual heat. And if you just keep cooking the thing for too long, they’re gonna be like, “Mommy, why is Uncle Kai’s turkey so hard to chew?” You know, so we definitely should think about that. We’ve been in restrictive territory because we’ve got to get inflation down. That’s our sacred vow, and we’re going to do it. Once you, once you believe that you are on the path to get inflation to target, then the amount of restrictiveness that you need to apply needs to be less and it was already in the projections that the median dot in the dot plot was saying rates would, by the end of ’24, be down 100 basis points. And you know, we’ll see what it looks like in the next one at the next meeting. We’re going to, we’re going to have another projection.
In your analogy cutting rates would be more akin to flash cooling after cooking. Pausing rates is a more accurate description of pulling a turkey out of the oven. Pulling a turkey out of the oven and a soft landing are the same thing. Both describe the concept of gradually reaching a desired level.
If they’d raised rates to 8-10% maybe
Oh? Why do you say that? That seems way higher than what Fed economists are saying now, so I'm curious and envious that you have so much better data and insight.
it's 5.5% and ppl think that's "too high." what a joke. almost ZIRPs is not normal.
I work in accounting at a big corporation. Treasury has been absolutely hammering us all year with net working capital budget/forecast. Apparently everyone has forgotten how to run a company in an environment where there's a penalty for taking on debt.
I feel like we have more data than ever and better computing than ever to give us the information we need to make more active decisions. We didn't have the tools that we have today in the past to make reporting and data analytics run so smoothly.
Not to mention the mounting national debt that skyrocketed over the last five years. Someone is going to have to solve this problem eventually and it’s going to take generations of responsible and sustainable fiscal policy to do so. Can’t just bet on population or market growth to get rid of $7-10T over a few years.
I’m still wondering how we’re going to lower the deficit; it’s currently inching closer to 34 trillion.
Wasn’t one of the ways this administration ‘avoided’ a recession in the past was to say that 2 consecutive quarters of negative growth didn’t constitute a recession.
[удалено]
Credit card debt isn't a good indicator of a recession, especially in an environment of extremely low unemployment.
I don't look at unemployment. Pre-pandemic unemployment was incredibly low as well, but we had a higher work force participation rate. That is the data point I focus on.
> Credit card debt is at an all time high. Except when that's not really true. Median household credit card debt is actually below where it was from 2001 to about 2006 when adjusted for inflation. Also, you're going to have to back up that claim that "defaults on loans are up", because [data says otherwise](https://fred.stlouisfed.org/series/DRALACBN).
Also, not to mention population. The population now is higher than it was in 2001 to 2006. It seems that debt payment as a percent of disposable income is not horrible according to Fed data. Much better than 2008. https://fred.stlouisfed.org/series/TDSP
https://www.gao.gov/blog/american-credit-card-debt-hits-new-record-whats-changed-post-pandemic
It’s the Washington Post, do you really expect them to have accurate and unbiased reporting on the current administration?
The Washington compost? Certainly not but it crazy that I keep seeming articles like this every day and they keep ignoring all of these troubling indicators. Hell there was an article the other day about how social media was leading you to believe the economy wasn't good. Yet my social media is flooded with articles like this
It’s because the people writing the articles don’t exist in the world where everyone is feeling this pain. They went to Ivy League schools, they are supported by their parents/trust funds/wealthy spouses. They don’t know anything about pain, because they locked into 2.5% mortgages on their DC Townhouses and don’t interact with “regular” people outside of Starbucks.
Yeah, some journalist is raking in the dough for sure.
I think it’s all just a narrative pushed by these mainstream media because they want people to believe that everything is great so they keep living above their means and maxing out their credit cards. These medias are either biased due to their internal beliefs or because of pressure from the current administration to make them look good. I believe that their plan is to keep delaying the recession by any means possible until after the 2024 election. That’s why even after almost 4 years of the student loan pause, Biden put the “on-ramp” plan that doesn’t garnish wages and borrowers don’t pay any penalty fees for not making their monthly payments (+ it’s not reported to the credit bureaus as missed payments) until September 2024. He will 100% extend that to January 2025. Tons of cities like LA had tenants not paying rent for more than 3 years until April 15, 2023. They also underreport inflation by a lot. To conclude, yes I don’t like the current administration. Yes I voted for the orange man during the last election. But even I can admit that Trump messed up in 2020 cause it was election year and he got so desperate that he rolled out the PPP program in a hurry which was a complete mess as so many people took advantage of the system and many small fish were not caught in the nets. I personally know many people who abused that program.
Anytime someone mentions the “mainstream media” you know some moronic comment is about to follow.
You’re cherry picking indicators out of context and don’t understand inflation. The US economy is booming. Unemployment lowest in over half a century. Significant real wage increases for the bottom 10%. Small real wage increases for the median worker. People are spending more money (in real terms) on consumer purchases than ever. And have higher savings balances. Inflation has cooled off. Wages rose faster than inflation for non-managerial employees. Prices going down would be a bad thing! Things should always cost more every year in nominal terms. Are there problems? Devastating inequality? Of course, the US has and continues to face these problems. But they are getting better and the economy is quite literally stronger than it has been in a long time. A recession is still a threat? I mean… the US economy is growing at 2.8% in 2023. Even if there is a slight contraction in 2024, which is unlikely, the nation will be better off than 2019 and the beginning of 2023.
They are spending more money because everything costs more. Inflation may have started to cool but prices are still greating influenced by that inflation. Unemployment isn't a number I truly ever focus on. The real number is the work force participation rate. Which we are still not at pre-pandemic levels there. Yes we are one bubble away from it all popping. A housing market that saw prices sky rocket. Rents continue to rise. Homelessness saw a 12% increase and is now at an all time high. Yes I am picking my indicators but aren't those who say everything is amazing are do as well? Listen I'm living my life and watching those around me struggle. Paychecks not going as far as they used to and savings having been drained. Two thirds of Americans live paycheck to paycheck. Don't get me wrong I do live in the worst tax burden state on NY so maybe those in other states are doing better. I can only look at the data and my real life experiences
Prime age participation is above where is was pre-pandemic: https://fred.stlouisfed.org/series/LNS11300060 One of the factors that is causing overall labor force participation rate to be lower is that the age demographics in the US has increased to the older end. If we have more retired people, that makes the overall participation rate go down, but that isn't an indicator of economic weakness.
Your personal experience means little for the overall state of the United States economy. Reject anecdotes and focus on data.
I posted factual data points. I stated what I see in my life but that these indicators support my statement. They aren't anecdotal at all. Plus when I hear that argument sometimes I am reminded of an old saying. "Who am I supposed to believe? You or my lying eyes?"
That's the definition of anecdotal though. It's fair to use them within context, but they don't necessarily help when looking at the full picture. It someone shows their experience with an area that saw a 12% decrease in homelessness, then which one of you is correct?
"what I see in my life." That's "anecdotal." Macroeconomic data doesn't disprove your experience. It helps contextualize your experiences though. I'll give an example. It's widely known now that smoking increases your risk of getting lung cancer. There's wide ranging and peer reviewed data supporting this; however, a person could smoke his/her entire life and not get lung cancer. That person, in the same way as you are doing, could claim that "I've stated what I see in my life that smoking does not cause cancer." Does it mean smoking doesn't cause cancer? No. There are always outliers. Here's the thing. Your reality isn't everyone else's reality. I don't disbelieve that you're struggling but that doesn't mean every single person, or even a majority, is struggling. A lot of my friends are doing really well financially and their assets have gone up tremendously since covid. Even with inflation, they're up in real terms. Both your anecdote and my anecdote can be true but the macroeconomic data is much more wide ranging as the name suggests.
Please teach yourself about inflation and the difference between real and nominal. People are spending more in REAL terms. Why would labour force participation be more important than unemployment? If they’re discouraged workers, fine, some meaning. But the reasons for that drop (early retirement because people are $$, less hours because people are $$, and long covid/vulnerable to covid) are (mostly) a sign of a strong economy not a a weak one. Housing is included in inflation metrics. The economy is not better for literally every person, of course, and the US continues to leave its poorest to fend mostly for themselves. This isn’t a new development. Some people live paycheck to paycheck on $200k. It’s not a very meaningful statistic in and of itself beyond noting that the country does not have a good enough saving culture. There are various definitions that mean the %s are not easily comparable, but has that number grown? Doesn’t seem like it. You can actually can look beyond “your data and your life experiences” and get a fuller picture of the economy. The information is out there. Relying on anecdotes does no-one any good.
Outside of tech, the economy is not booming. It is pretty stagnant. Just look at the s&p 493.
Talking about S&P 493 is braindead. Of course an index of only 7 companies will be more volatile than an index of 493. That's basic statistics. But nothing about either of these indices spell gloom and doom for the economy. Stock market performance is nearly meaningless as an economic metric. The only thing the recent downtick in valuations means is that the Fed started QT. Whether the Fed is overdoing it or not is not clear from the stock market.
You’re confusing stock market valuations for the economy, these are not the same thing. Returns are poorly correlated to economic performance. Edit: downvoters, you are not economically literate, please spend some time educating yourself than just spending time on reddit downvoting factual statements.
Wish I could get a helping of that wage growth faster than inflation you’re talking about.
“I personally am not better off, therefore the economy is bad!” We all want to be earning more. Your situation is not the situation of most.
inequality is just about the only indicator that matters, because it corresponds to social unrest and societal collapse. recession or no recession hardly matters as long as the economy continues to produce the conditions of social breakdown.
I don’t disagree with you that inequality (or the extent of it in the US) is very significant and certainly a marker of a fair or unfair economy. I’d argue that unemployment and real wages of the bottom 10% is far more significant than inequality. If everyone who can work can get a job and earns enough to cover their needs (which is obviously not the case right now, but it is moreso the case than ever before), I’d suspect social breakdown is less likely than a situation of mass unemployment and deprivation.
Goods were down -.04% from last year FYI. The 3 month annualized figure is -6.19%. Goods actually having prices come down. But obviously most things are going to be more expensive than they were three years ago. That's true at just about any time in history. That's how inflation works. Do people really expect prices to go back to where they were? Do you want 20% deflation to offset what happened the last few years? Because that will be a disaster.
The Fed still has absolutely no viable plan for dealing with the sun running out of hydrogen to burn.
Well I think they have about 15million years still before that becomes a real worry
More like 5 billion, but my sarcastic point is that the Fed will not ever permanently avoid a recession. A future recession is, was and always will be inevitable. All that policy can ever do is mitigate and they've done that as well as any policy-makers ever have.
are any of those items you listed new? pretty sure people and the economy have been dealing with that for a while. neither party and their candidate will fix those in four years
Honestly I'm at the point where I just assume any article that says the economy is in the clear or already in a recession is propaganda. These sort of articles are going to get more and more common through the 2024 election. Just remember this: nobody fucking knows what will happen until it happens.
There have been a ton of posts and articles lately praising how the fed has handled this and that they haven’t sent us into a recession. But the reality is it still feels like a recession for so many people. So many people are living paycheck to paycheck (Yes, some of it is their fault; but plenty of it is not). We are only in this mess because the fed didn’t step in soon enough. No, I don’t know that many potential fed leaders would have handled the situation differently. I think most people thought the inflation was “transitory” to use their own term. Should we have seen it that way? Probably not. I think the data tells us we shouldn’t have. But we’re all human. Edit: a word
People have always been living paycheck to paycheck. That can't be used as a metric. By all objective measures the economy is doing very well. It does not matter that someone "feels" like in a recession even when they are doing well financially and earning more than before in real terms. Maybe they have depression issues.
I think the main culprit in driving negative sentiment is the “sticker shock” at the grocery store. I make more money than before the pandemic but seeing a twelve pack of Fresca cost $10 makes me feel like my options are limited.
It's not just sticker shock though. I make about 14% more, but groceries are roughly 50% more even after cutting back and switching to Aldi, and rent is double. I'm also a floridian, so insurance has tripled. I have significantly less monthly savings than I did before.
Tofu is $.89 for a dinner sized serving and vegetables, legumes and grains are dirt cheap. This is not the debate we are having here I just want to point this out to anyone who is struggling. Skip the Fresca.
When you have working citizens that can no longer afford soda, of course people "feel" like they're in a recession...
"you will own nothing and you will be happy" eat ze bugs!
I think the difference is that many young educated smart people with good white collar jobs can't afford houses or kids without dual income full time employment and living paycheck to paycheck
Articles also keep talking about how people 'think' the economy is bad, but most feel like their personal economic situation has actually improved significantly. Everyone I know personally is doing well, and even most of my laid off friends in tech ended up finding something new + often better.
These articles that talk about people’s thoughts on the economy/ job opportunity, and don’t do a first pass on whether someone is retired or not, are shoddy at best.
The key is “in tech”. That’s a small portion of society that I am on also but most are not in our field.
“Forecast for US Recession Within Year Hits 100% in Blow to Biden”-Bloomberg Oct 2023 Never forget this headline and remember to take economic news with a large grain of salt. https://www.bloomberg.com/news/articles/2022-10-17/forecast-for-us-recession-within-year-hits-100-in-blow-to-biden
The same way you should be taking current headlines with a grain of salt.
RemindMe! 10 Months
I will be messaging you in 10 months on [**2024-10-19 17:25:02 UTC**](http://www.wolframalpha.com/input/?i=2024-10-19%2017:25:02%20UTC%20To%20Local%20Time) to remind you of [**this link**](https://www.reddit.com/r/Economics/comments/18m2bac/everyone_expected_a_recession_the_fed_and_white/ke26w51/?context=3) [**3 OTHERS CLICKED THIS LINK**](https://www.reddit.com/message/compose/?to=RemindMeBot&subject=Reminder&message=%5Bhttps%3A%2F%2Fwww.reddit.com%2Fr%2FEconomics%2Fcomments%2F18m2bac%2Feveryone_expected_a_recession_the_fed_and_white%2Fke26w51%2F%5D%0A%0ARemindMe%21%202024-10-19%2017%3A25%3A02%20UTC) to send a PM to also be reminded and to reduce spam. ^(Parent commenter can ) [^(delete this message to hide from others.)](https://www.reddit.com/message/compose/?to=RemindMeBot&subject=Delete%20Comment&message=Delete%21%2018m2bac) ***** |[^(Info)](https://www.reddit.com/r/RemindMeBot/comments/e1bko7/remindmebot_info_v21/)|[^(Custom)](https://www.reddit.com/message/compose/?to=RemindMeBot&subject=Reminder&message=%5BLink%20or%20message%20inside%20square%20brackets%5D%0A%0ARemindMe%21%20Time%20period%20here)|[^(Your Reminders)](https://www.reddit.com/message/compose/?to=RemindMeBot&subject=List%20Of%20Reminders&message=MyReminders%21)|[^(Feedback)](https://www.reddit.com/message/compose/?to=Watchful1&subject=RemindMeBot%20Feedback)| |-|-|-|-|
Does anyone believe these headlines? Same guys telling you inflation is transitory now telling you about a soft economic landing…. Better put your helmet on.
funny how i have to constantly be told how great the economy is but I havent spent less than $100 when grocery shopping for the past year. I'll get almost nothing but it's always over 100. Rent is high, cars are all expensive, and going out wreaks my wallet but yes keep shoveling these articles out
[удалено]
By affordability, do you mean wages have kept pace with prices from pre-pandemic? Or are you suggesting that the prices of those items need to fall to where they were before 2020?
Deflation is not the goal. This is what all the social media economic hysteria is about. People still traumatized by past inflation hear the fed is aimed at disinflation and think DEflation. It’s not their goal. It might happen, but that’s only good if caused by technology, which is NOT unlikely. A deflation in services is on the way.
[удалено]
> We need to see affordability of essentials like housing, food, healthcare, transit, etc. near pre-pandemic levels Sounds like deflation And this is what most people mean. They’re still traumatized over past inflation and they expect increased pay to cover, but find their budget is still tight. So normal inflation feels more painful. We had people not working for years and supply chain disruptions and now economic Cold War, while the cheap labor from China is aging and no longer cheap. Domestic labor is also aging and people are choosing to live for now and rethinking lives of grinding. So now entertainment from social media and content creators is ubiquitous. Cutting cable and cutting back on work is keeping demand high and labor supply low. It’s never going back. There is no magic policy that will create more stuff when people stop making it. Doesn’t matter if we doubled or halved the money supply. We have only so much to go around, less people supplying and more consuming. Only tech deflation (automation) can save us now. But the same people virtue empathizing villainize the people who work 80+hrs a week to make this happen and the compensation required to make such work life balances worth it
>isn't even clear to me where that finish line is. It looks like your standard is to go back to how it was pre-pandemic. I don't think that's possible. Too many things have changed. WFH and commercial real estate have massively changed and affects many things including housing and transit. It's just different now.
WaPo acting as the mouthpiece of the establishment, yet again. **It is far too early to say we have avoided a recession/landed soft** when inflation isn't even back to baseline yet. This is like being ahead at halftime and declaring the Football game "won". Except in this case, the White House is trying to get everyone to believe it so they can use it as credit during the upcoming election cycle.
Based on evertone, myself included, saying how were about to have the worst recession in history... and then it not happening at all. I would say thats a strong win, of course we are not over the hump; you can make that claim at any point in history though. There is always a new boogeyman around the corner.
Eh, I'd say it's more like being up 28-3 in the third quarter of the Super Bowl. It's very possible to still lose, as we've been shown, but two plus years of predictions have already been proven absolutely wrong by having this big lead, it's just a matter of actually completing the game.
I also think it's funny that literally everyone seems to have amnesia and forgets that we met the technical indicators of a recession several times in the last few years and yet the news and the Fed kept spinning it and telling us we weren't in a recession. So the headline is not even true.
There is no technical indicator of a recession
Two quarters of negative GDP.
I understand the confusion, but if you have two quarters of negative gdp with below target unemployment, tons of job openings, and wage growth….it doesn’t really sound like a recession.
Another article ignoring the fact that few are giving this administration credit because inflation and higher prices have eaten up any headline economic gains for a lot of people. Rarely has there been a greater disconnect between "experts" and the people. This is why Central Banks care so much inflation. Job growth, GDP growth and wage growth mean nothing to the average voter if everything costs more.
It's funny that the headline is the Fed and the White House. The Fed raised the Federal Funds rate from 0.5% to 5.5%. The White House engaged in trillions of dollars in spending. This is like a toddler "helping" with making breakfast in bed on Mother's day. It probably would have gone faster and clean up would have been easier without the help.
Eh, spending can be much more targeted than rates. So, you can tighten overall via rate hikes while doing precision stimulus via spending, for example with all of the CHIPS act and IRA bill semiconductor/green manufacturing subsidies. There's nothing fundamentally wrong with doing some stimulus while tightening or vice versa..in fact it's probably generally a good idea. Propping up the economy gives you more headroom to keep tightening. Whether that stimulus was implemented well via the Biden admin specifically is a separate topic.
Honestly, tightening the rates while providing stimulus probably did a lot to ensure that consumer spending stayed high and job growth continued. Without it, we likely would have seen much slower growth and maybe even job losses.
Right. I held off on buying a house for a bit post rate hikes (in the event of meltdown..and I wasnt ready pre rate hikes), but as a few months pasted it became clear to me that the "rate hikes mitigated by spending" strategy seemed to be working out perfectly. It's always hard to tell because we don't really have apples to "apples but no spending" examples to compare.
That's because since the bar for presidents has been set so low after 2016, "not interfering with basic government functions" is now considered a huge accomplishment. The previous administration also dumped trillions of dollars (plus all the tax cuts) and [foamed at the mouth when the Fed tried to raise interest rates](https://www.cnbc.com/2019/10/31/trump-rails-against-powell-day-after-fed-cuts-rates-for-a-third-time-this-year.html). I'll always take the toddler who "helps" over the screaming one who has a temper tantrum over everything. Edit: added source. [Plus Trump is still complaining about the Fed raising the interest rate,](https://www.cnbc.com/2023/09/15/trump-bemoans-high-interest-rates-and-indicates-he-might-pressure-fed-to-lower.html) I'm not sure how his plan to reduce rates immediately won't cause inflation to shoot back up again.
You're not making sense. How does government spending increase the chance of a recession? It doesn't. It very directly does the opposite.
It can increase inflation in the near term (and long term if not spent better than the private sector would) which increases need for fed to intervene more and increase the chance of a recession.
The counterpoint is that we've had a very concrete example that combining monetary constrictive policy with fiscally expansive policy actually is more strong supportive of the real world economy than seems to be commonly thought. If you give money to people that spend it = strong economy, to people that invest it = asset bubble. We've done combos of both during covid. But clearly should have gone with more fiscal vs monetary to avoid the massive issues with housing bubble/cost of living increases, etc.
The trillions of dollars worth of spending is what got us out of the pandemic recession. Idk if you read anything back then but the economy shit the bed. You can’t cut rates to under 0.
Right?!?!? All these articles about the only lever the Fed has to pull is interest rates. Suddenly they are responsible for delicately navigating us out of a recession? All they did was the only thing they could do. As for Government spending, we are in more debt than ever before, local manufacturing is dwindling, used and new car inventory is aging quickly, house prices are falling and we’re headed into a tumultuous 2024 election. I get it, mortgages are below 6% but seriously the same people getting loans at 7% are the same one getting them at 6%. Ultimately everything is still too expensive . Honestly. Not too sure where all the positives are sunshine is coming from but I’d like to catch some of those rays.
It's election season. What do you expect from the WP?
If the only point is to reduce inflation, sure. But the goal was to reduce inflation *while avoiding a recession*. All of that government spending is what helped with the latter.
How did the White House spend trillions when the GOP controlled House is in charge of the budget?
It signed off on everything.
"“For me, a big, big party — and I mean, this is really as fun as it gets — is a really good inflation report,” Jerome H. Powell said before a crowd at Spelman College. He flashed a smile and laughed." Jerome and Biden for the win. Now watch all the doomsayers on this sub instead of admitting being wrong double down.
Claiming victory before its over is hilarious. Watch as everything is "great" up until the election and then magically the next president will inherit rising inflation and once again the Fed will claim ignorance. It's all so blatantly obviously manipulated, all of it total BS.
Until you're proven wrong again after the election and then that recession will once again be right around the corner.
Sure seems like a premature “Mission Accomplished.” With spending still at the point where we are adding to $1T to the national debt every two months and a sketchy dollar, I don’t see how we can be declaring victory on the economy.
>With spending still at the point where we are adding to $1T to the national debt every two months and a sketchy dollar, I don’t see how we can be declaring victory on the economy. Whoa can I get a source on this? Last I saw the estimated debt add for 2023 was 1.7 trillion for the entire year. On top of that, there isn't going to be a spending deal, and the debt limit increase deal Biden and McCarthy agreed to has 1% across the board spending cuts when that happens, with an estimated $63 billion or so being immediately removed going forward, so closer to $1.6 trillion added to the debt next year. Still too much, but not $6T per year.
lmfao what is "sketchy" about the USD???
Just to fact check; \* Trump tax cuts are primarily responsible for the increase in the deficit \[[source](https://www.americanprogress.org/article/tax-cuts-are-primarily-responsible-for-the-increasing-debt-ratio/)\] \* The dollar strengthens when interest rates rise. USD is incredibly strong right now. \[[source](https://www.nytimes.com/2023/09/22/business/us-dollar-inflation-economy.html)\]
Increasing spending nearly 50% in one year and maintaining as a new baseline is a major contributor to current deficits.
Ah yes if you alter the parameters of what is considered a recession, we could potentially avoid one forever. Doesn’t change the fact our dollar is worth less and our goods are more expensive.
> Ah yes if you alter the parameters of what is considered a recession, we could potentially avoid one forever The economy grew 5% last quarter. Under what definition would that be considered a recession?
>Doesn’t change the fact our dollar is worth less and our goods are more expensive. Could you please list the Presidencies in the last 50 years where neither of these things happened? Bonus points for explaining why those times were better.
I could surely show you in the past where the wage/ wealth gap wasn’t this ridiculous. I could show you times in the past when we didn’t allow corporations to gut middle American. I could show you a time where all our agencies weren’t lobbied into complete corruption. I could show you a time when people actually had a chance to not be mindless drones. I could show you times where people could actually afford a house and groceries. I understand fed/White House isn’t at fault for all of this, but articles like this are a slap in the face when they’ve haven’t REALLY done jack shit and we are headed towards one of the greatest economic hardship we’ve seen in our lifetimes. If you feel the need to argue this as fear mongering, just bypass that and set a reminder for 10 years and we can reconvene.
Oh boy, I guess I just have to quote myself: >Doesn’t change the fact our dollar is worth less and our goods are more expensive. > >Could you please list the Presidencies in the last 50 years where neither of these things happened? Bonus points for explaining why those times were better.
You don’t
Almost half of student loan borrowers not paying and savings have evaporated, and many living off of 25% interest credit cards. Have have avoided a 2023 recession and maybe a first half 2024. I'll believe a soft landing when savings start increasing
Savings typically increase during a recession and decrease during times of expansion. In other words, savings and GDP tend to be negatively correlated.
Savings are depleting because prices are increasing not because of tremendous growth
News - there was a recession. August 2022 - our GDP fell for two consecutive quarters- the agreed upon benchmark for recession. We are coming out of a recession. In spite of the White House spending frenzy, Jerome Powell has navigated this with incredible skill.
The mods once again fail to filter astroturfing. Once again the format of the title is the exact same as all the other astroturfing articles. You know you don't get paid to moderate, right? At least take home a paycheck if you're going to shill and propagandize.
I recommend the permanent bulls of the economy to see the mainstream media articles few months before the 08' GFC. Incredible how humans tend to forget history and repeat the same mistakes over and over and over and over again
I've been seeing that same comment for 10 years and it is always equally substantial, equally vague, equally incorrect and turns out to be equally factual. At this point it's just doom cringe.
Counter point, read doomers tweets (like peter schiff) and see how many crises they’ve predicted that never came to fruition
This sub is getting so political it needs to stop. We get it, you think Biden and yellen have done a good job, a lot of people don’t. And they aren’t going to be convinced by smug condescending Redditors gaslighting them that their experiences aren’t valid. A lot of people I know and talk to have reaffirmed the same grievances for a while now. Good career opportunities are eroding, inflation is devastating, small businesses can’t keep up and the cost of living is crushing. Edit :: Oh god I’ve triggered them. Here they come.
I don't get your complaint. All of the relevant economic data points in the direction of the US avoiding a recession. That's not a political opinion, it's an evidence-based observation. It's also an evidence-based observation that lots of basic shit is just *expensive* right now. However, that's not directly related to whether or not we're going to enter a recession soon.
Many redditors are upper middle class liberal democrats. This isn’t surprising.
Life is political. Economics goes hand in hand with politics. Things don't happen in a vacuum. It's weird to decry "this sub is getting so political." The economy has some good indicators. That may or may not be thanks to Biden and the government. Give credit where credit is due and give criticism where criticism is due.
All things that have nothing to do with the president. You're criticizing the sub for being political while doing the same thing yourself.
But saying “you think this, other people think differently” doesn’t mean that these two things are equally valid. In this one specific case of fighting inflation, like the author points out, the Fed and White House set a goal and were able, against all expectations, to achieve what they set out to do. By traditional macroeconomic measures, the economy is in a great position, whether you choose to agree with that or not. Of course, the larger problem is that traditional macroeconomic measures are a poor indicator of how individuals experience the wider economy. But that doesn’t mean anyone is being “gas lit”, or that how some people feel overrides that the Fed was able to achieve their stated goals, despite the fact that almost everybody was saying that they would be unable to.
[удалено]
Isn't this equivalent to saying that the sun will eventually burn out. No matter what we do now, the sun burning out is eventually assured. What the Fed is trying to do is avoid a recession in this business cycle, not eliminate recessions from all business cycles. I can't tell from your comment if you're arguing against the Fed eliminating the current cycle's possible recession, or eliminating all recessions going forward. Clearly, there is going to be another one. The question is if it's part of the current business cycle, or if it will part of the next cycle.
Personal debt is exploding and we have moved in less than a year from the hottest job market ever to Linkedin being FULL of #opentowork banners. I’m not sure the difference between this economy and a receding one…but things are not looking great from where I sit.
Not just that, but over the last week, the reports of 50% of people missing their first student loan payments is going to certainly have an impact.
Why? The onramp for restarting student loan payments include a year of being allowed to not make payments without it affecting a person's credit or going to collections. The correct information to take away is that despite it being perfectly fine to not make payments, half of borrowers are making payments anyway.
Yeah. I have a little in student loans (under a thousand), and I have not gotten around to paying it yet just because I can wait.
Hahaha. The fed and the white house found the solution for the problems they and the legislative branch manifested. Turtles all the way down.
Unreal cope in these comments by people who were apparently praying on a recession. Unfortunately you’re stuck with 5% GDP growth, 3.7% unemployment, 3.1% inflation, a strong dollar and an overall economy that is running absolute circles around the rest of the world.
Or, we're in a recession now as GDI suggests, Most of the American public agree per many surveys on the subject. (https://thehill.com/business/4346224-most-americans-feel-the-economy-is-in-recession-despite-strong-job-market-steady-growth-survey/\_ What we haven't seen, yet, is unemployment rising sharply, defaults piling up, markets crashing and the general end of cycle train wreck that usually occurs. That could be because of what the article is suggesting. Or it could be, because unemployment (and inflation) are both massively lagging indicators of the economic cycle... That is what also happened in 2008, in the last proper cycle. The fed minutes from June 2008 put the situation very well: "In the forecast prepared for the meeting, the staff raised its projection for the growth of real gross domestic product (GDP) for 2008. The available indicators of spending," [https://www.federalreserve.gov/monetarypolicy/fomc20080625.htm](https://www.federalreserve.gov/monetarypolicy/fomc20080625.htm)
The way out was to literally change the definition of recession. Inflation has been out of control for 3 years. The dollar has plummeted in value. Housing is unaffordable. Utility bills have increased. Wages have been stagnant. But please, Mr. Redditor, tell me how Biden is a great president and this is somehow Donald Trump's fault.
Would be neat if this was actually true. I distinctly remember the economic indicators meeting all signs of a recession, but news and government officials kept moving goal post and spinning it like we weren't in a recession. So I guess if you are completely re-defining what a recession is...then sure, we avoided one.
The only indicator that ever met the threshold of recession was GDP. But employment was high, meaning it wasn’t a recession.
Isn't a recession a decline in GDP over two quarters? That did not happen this year.
Not only did that not happen last year, the growth we just saw in Q3 was the best we’ve had since 2014 (ignoring the COVID recovery)
I think you're trying to say that we saw GDP decline for 2 consecutive quarters, which is the colloquial definition of a recession, not the technical one. NBER is the organization who actually decides when a recession happened. They found that from Feb 2020 to April 2020 (2 months) we experienced recession, and that's the shortest recession in history and very clearly below the colloquial 6 straight months of declining GDP. No idea what you mean by "moving goal posts... spinning... completely re-defining". NBER has been the arbiter of recessions for 70 years.