Should the FED do rate hikes? (US)

[The3rdCatalyst]

The US has had 0% interest for over 7 years. If we had rate hikes it would give evidence that the economy is doing well. There is some other evidence that things are okay, like low unemployment, but the counter argument is that those are low paying jobs which were added since 2008.

In general, is the US economy doing well or is it healthy enough to start adding interest again?

[Gheld]

The US has had 0% interest for over 7 years. If we had rate hikes it would give evidence that the economy is doing well. There is some other evidence that things are okay, like low unemployment, but the counter argument is that those are low paying jobs which were added since 2008.

In general, is the US economy doing well or is it healthy enough to start adding interest again?

So many people have gotten onto ridiculously low rate mortgages and purchased houses even though they couldn't afford them if interest rates were realistic. I guarantee you any significant increase in the prime interest rate is going to lead to another housing market collapse/foreclosure crisis.

[Caolela]

The problem is that the economy isn't doing well, unless you believe the phony numbers put out by the gov't on a regular basis now. The threat that they'll raise interest rates is a ploy to get foreign buyers for U.S. treasuries, which helps prop up the dollar.

[The3rdCatalyst]

So many people have gotten onto ridiculously low rate mortgages and purchased houses even though they couldn't afford them if interest rates were realistic. I guarantee you any significant increase in the prime interest rate is going to lead to another housing market collapse/foreclosure crisis.

I think that is the idea why the FED will not. If the economy isn't growing but is just being expanded with inflation then by increasing interest will pop the bubble. On the other hand if things are okay then people would theoretically start seeing a country wide growth..

[Gamdwelf]

Yes the economy is fine raise the rates.

[Independent voter]

5% unemployment rate, more jobs than there are workers to fill them. Times are good. China seems to have settled down.

I bet she raises the rates.

[Gamdwelf]

5% unemployment rate, more jobs than there are workers to fill them. Times are good. China seems to have settled down.

I bet she raises the rates.

I hope the stock market doesn't dip hard on rates going up I mean going from 0 to even 1% isn't going to have people move their money into banks.

[satimy]

Zirp is like the invasion of Iraq, made people feel good that we were responding to being attacked on 9/11. When we pulled out it was a disaster. Thing is, occupying a country for 100 years isn't a plan. Zirp made a collapsed economy feel good, but when reality sets in everything will crash. The other option is to become Japan, and run zirp and qe for 30 more years and still have no results. Zirp and qe fuck over everyone but the banking elite

[Gheld]

I hope the stock market doesn't dip hard on rates going up I mean going from 0 to even 1% isn't going to have people move their money into banks.

No but for the people I mentioned 1% turns a 775 dollar a month mortgage payment into an 875 dollar a month mortgage payment and that's make or break for some of them.

[satimy]

No but for the people I mentioned 1% turns a 775 dollar a month mortgage payment into an 875 dollar a month mortgage payment and that's make or break for some of them.

No sane person has a variable mortgage

[Reeve]

Hey, someone's using the word "Fed" correctly! /applaud

No, they shouldn't, because I want to buy a house soonish and I want good rates.

[Gheld]

No sane person has a variable mortgage

Yeah. That's my point. The only reason somebody would get a variable mortgage is because they were desperate to get a mortgage, and some shiesty mortgage broker was like "Yeah...don't worry, interest rates haven't gone up in the last 8 years." So the people on variable mortgages are the people who are make or break at an extra 1%.

[Reeve]

I hope the stock market doesn't dip hard on rates going up I mean going from 0 to even 1% isn't going to have people move their money into banks.

The stock market can lose their shit all they want. The market has temporary tantrums when they see something they don't like, but they always bounce back up.

[Tierbook]

No but for the people I mentioned 1% turns a 775 dollar a month mortgage payment into an 875 dollar a month mortgage payment and that's make or break for some of them.

My brain must be broken because that looks like a 10% increase.

[Daelak]

Hey, someone's using the word "Fed" correctly! /applaud

No, they shouldn't, because I want to buy a house soonish and I want good rates.

Yea they should keep it down longer, they would be crowding people out of purchasing homes.

[Annoying]

My brain must be broken because that looks like a 10% increase.

1% interest over decades yielding a 12% increase in total cost of a house. Google has a mortgage calculator, and if you play with the cost of the house and percent to get ~$775 a month, adding 1% pushes the monthly payment to $881/mo

[Skroe]

Yep time to do it.

Doing so will also strike another blow against emerging...err I mean submerging markets, so that's always fun.

[Deleted]

It`d be a perfect albeit small bitchslap to countries like China.

And who can object to that?

[fengosa]

No but for the people I mentioned 1% turns a 775 dollar a month mortgage payment into an 875 dollar a month mortgage payment and that's make or break for some of them.

Rates wouldn't go up 1% immediately. A quarter or half percent is more realistic.

[Gheld]

Rates wouldn't go up 1% immediately. A quarter or half percent is more realistic.

The median personal income in the US is only 26k a year. Even .25% is a lot sucky for a lot of people.