Catherine Rampell says that if we achieve the coveted economic soft landing, it won't be because of anything radical we did:
It will be because of boring, standard economic textbook fixes for inflation: i.e., supply shocks subsiding, fiscal support fading and, most controversially, interest rates rising.
The Federal Reserve’s 10 rate hikes since March 2022 seem to have dampened consumer demand and brought it more in line with constrained supply — just as traditional economic theory would predict.
This is true as far as it goes. Consumer spending has indeed been flat since the start of the year. But there's more to spending than just consumers; there's also government spending. If you add the two together, it looks like this:
Total spending has continued to rise over the past year and is right on its pre-pandemic trend. On the other hand, here is gross domestic investment:
Domestic investment has fallen 7% since 2022, though it's only barely gotten recently below its pre-pandemic trend. That said, you'd expect interest rate hikes to affect investment before spending, and that's exactly what's happened.
Take these two together and it looks as if the Fed's policy actions have had only a very modest impact on the economy so far. That impact may well increase in the second half of this year.
"That impact may well increase in the second half of this year."
Right in time for the election... because of all the inflation.
Which is all over the news.
Which you need a recession to cure.
It's all very predictable, isn't it. The ghost of Arthur Burns laughs... not to re-elect a Republican this time, but to make sure a Democrat isn't....
Finally, my paycheck is $ 8,500 A working 10 hours per week online. My brother’s friend had an average of 12K for several months, he work about 22 hours a week. I can not believe how easy it is, once I try to do so. This is what I do
🙂 AND GOOD LUCK.:)
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HERE====)> https://iplogger.com/1rkjJ9
So, just going to ignore that the person quoted here is saying that the rate increases have already had an effect? Y'know, in contradiction to all the other posts here (and this post's title) about how the increases haven't had an effect?
Oh yeah and this post continues to be wrong, too. Yes, there may be some effect still in progress from the rate increases and those may take some more months to fully ripple through the economy. But you continue to be wrong about when and how rate increases affect the economy.
It's not a delayed effect. Raising rates is more like throwing a stone up into the air over a body of water: first there is the expectation that the stone will impact the water, then there is the splash of the immediate effects, then there are all the ripples, and eventually the water is calm again.
You seem to think that rate increases skip everything between the expectation and the adjusted (post-increase) monetary environment after the rate increases have fully filtered through the economy. That's simply not true. The largest impacts from the Fed's rate increases were felt within a few months of those increases.
Exogenous sources of inflation: Pandemic responses including (1A) supply chain disruptions, (1B) federal stimulus spending and (1C) federal bank balance sheet increases; War downstream effects including (2A) energy disruptions, and (2B) sanctions.
For (1B) and (1C): Chart.