Submit your comments on this article |
Economy |
Fed raises Prime by 75 basis points - again |
2022-11-03 |
[MSN] The Fed, as widely expected, raised its key short-term rate by three-quarters of a percentage point to a range of 3.75% to 4%, a decidedly "restrictive" level intended to fight inflation by further slowing an already wobbly economy. Since March, the Fed has hoisted its federal funds rate; what banks charge each other for overnight loans -- from near zero, its most aggressive such initiative since 1980. Rate was close to zero in Jan 2022. Powell hinted that the next few rate hikes might be less than 75 basis points. NYSE liked that. Mortgage rates probably will hit 8% soon. |
Posted by:Lord Garth |
#7 The United States is on pace to spend more to maintain its debt than on its own military. In the third quarter, the federal government spent over $184 billion on interest payments on its debt. That means an annual cost of over $730 billion. Meanwhile, the Department of Defense 2022 budget was about $720 billion. That is the debt trap we are in. Any interest rate above zero is highly inflationary since the only way to pay the interest is to print or borrow money. Printing money means inflation now. Borrowing means even higher inflation (not very far) down the road. |
Posted by: Angease Peacock5533 2022-11-03 17:55 |
#6 Tom True that current rates are not restrictive enough yet. That's why another two, or maybe three, rounds of rate increases are very likely. |
Posted by: Lord Garth 2022-11-03 17:47 |
#5 "a range of 3.75% to 4%, a decidedly "restrictive" level " This is laughable to anyone over 50. We remember Fed funds rates over 20% (not a typo.) AND inflation is still at 8.2%. These rates aren't even close to being "restrictive." |
Posted by: Tom 2022-11-03 14:04 |
#4 From the Epoch Times - Interest on Government Debt Set to Exceed Total Annual Defense Spending By Petr Svab November 2, 2022 Updated: November 2, 2022 The United States is on pace to spend more to maintain its debt than on its own military. In the third quarter, the federal government spent over $184 billion on interest payments on its debt. That means an annual cost of over $730 billion. Meanwhile, the Department of Defense 2022 budget was about $720 billion. |
Posted by: NoMoreBS 2022-11-03 12:17 |
#2 They'll just print more money for the higher debt payment. Slow Joe says that'll work |
Posted by: Frank G 2022-11-03 08:36 |
#1 How does this affect the Federal 'budget'? Don't we pay interest on the National Debt? |
Posted by: Bobby 2022-11-03 08:33 |