janetyellen

Strong Economy Spurs Fed To Hike Interest Rates

Reuters reports:

The U.S. Federal Reserve raised interest rates by a quarter point on Wednesday and signaled a faster pace of increases in 2017 as the Trump administration takes over with promises to boost growth through tax cuts, spending and deregulation.

The rate increase, regarded as a virtual certainty by financial markets in the wake of a string of generally strong economic reports, raised the target federal funds rate 25 basis points to between 0.50 percent and 0.75 percent.

“In view of realized and expected labor market conditions and inflation, the committee decided to raise the target range,” the central bank’s policy-setting committee said in its unanimous statement after a two-day meeting.

“Job gains have been solid in recent months and the unemployment rate has declined,” the Fed said, noting that market-based measures of inflation compensation had moved up “considerably.”

The rate increase was the first since last December and only the second since the 2007-2009 financial crisis, when the Fed cut rates to near zero and deployed other tools such as massive bond purchases to stabilize the economy.

  • Lazycrockett

    This will just further the Drumpf conspiracy theory that she kept them low to help Obama.

  • bkmn

    It won’t take Trump long to trash the economy and they will have to return to lower rates.

    • Yixing’s Fluffer

      That’s why Yellen is building up the buffer now. We’ve never gone negative and it could get chaotic the first time around.

      • Mark_in_MN

        We shouldn’t be building a buffer, we should be keeping them low in preparation.

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  • PickyPecker
    • JCF

      {shudder}

  • Oikos

    Raise them higher after inauguration day. Then tax cuts for the 1%, doubled military spending and shredding of the social safety net can bring on the next depression.

    • PickyPecker

      Should happen quickly enough, I would think.

      • Oikos

        We haven’t completely recovered from he last one. Won’t take long.

        • Ninja0980

          The hubby and I will be safe.
          Wish others could have our luck.

    • Cipher

      Deregulation! Don’t forget the deregulation!

    • perversatile

      I’ve heard the Republicans have a long standing tradition of destroying the economy, and starting a depression/recession as a sort of celebration for hijacking the presidential election and putting their guy in office. A sort of White House warming present as it were.

      • Oikos

        Tax cuts for all*!!!!!!

        *void in some areas. Non wealthy not eligible.

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        • Kate

          Oh, everyone’s eligible, but a 2% cut means a lot more to a billionaire than it does to a minimum wage earner, for the exact same reason that a $500 cut matters more to the minimum wage earner than the billionaire.

          When there is a progressive tax code, tax cuts are going to benefit the wealthy more, unless they are specifically written to exclude them, or to affect the lower brackets but not the higher ones.

          The latter is the much better way to do it, as it avoids putting people in a position where people making more money results in them having less in their pockets. We see this with subsidies – we have a friend who has to keep her income down, because she’s eligible for means-tested programs, and if she made just a little bit more, she’d end up losing money.

          A tax break that intends to be “fair” will generally favor the wealthy, because they pay more in taxes. A tax code designed to be fair will generally take the opposite approach – recognize that the rich get more benefit from their taxes, and that their ability to earn that much is a function of the system that enables it.

      • Ray Butlers

        Destroying the economy pits us against each other. And they laugh and laugh and laugh at us.

        • perversatile

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          Wants to Bring Back “Off With Their Heads’
          -The Story Of A Generation Determined To Be The Last

  • Trump sure is inheriting a different situation from the one Obama inherited from the last GOP president (who also came into office without winning the popular vote.)

    • Oikos

      Bush had the same gift from Democrats, a surplus and a booming economy perfect for a republican for starting new wars and destroying the economy.

      • Guest

        The economy is far better but it is not booming. That is why Trump was able to sell the fantasy land of great jobs like when we were the only economy left after ww2.

        And the deficit is lower and as Obama promised in the later years, the debt us dropping. But there is no surplus.

        Show your proof of your comment.

        • Oikos

          I don’t answer to anonymous ‘guest’ trolls. Fuck off, maggot.

  • HZ81

    Just remember, Trump’s first budget won’t take hold for almost a year when passed, so he, at our lapdog press’ pleasure, will be taking credit for this economy.

    Just wait until his tax breaks for his friends break us all.

  • Lazycrockett

    Meanwhile. Yes this is how mental the man is.

    https://twitter.com/SteveKopack/status/809116935531196417

  • bambinoitaliano

    What else is new? The Democrats fix the economy tanked by GOP and now Trumpanzees are going to waste it all once again.

    • Jean-Marc in Canada

      The Circle of Strife (apologies to Timothy Rice & Elton John)

      Nants trumpanza bagithi baba (here comes a liar)
      Sithi uhhmm trumpanza (oh yes, it’s a liar)
      Nants trumpanza bagithi baba (here comes a liar)
      Sithi uhhmm trumpanza (oh yes, it’s a liar)
      Ingonyama
      Siyo fuckitup (we’re going to fuck it up)
      Ingonyama
      trumpanza goldsachsa’ enamabaal (it’s a liar and a lyin’ banker)
      [repeats 5]

      From the day we arrive in DC
      And, blinking, step into some shit
      There’s more to fuck up than can ever be fucked up
      More to delay than can ever be delayed
      There’s far too much cash to take in here
      More to grift than can ever be conned
      But with tax cuts rolling high
      Through the ever grey sky
      Keeps the rich rich and the small under heel
      It’s the circle of strife
      And it moves us all
      With disrepair and right wing tropes
      Through fake faith and hate
      Till we find our place
      On the path dwindling
      In the circle
      The circle of strife

      It’s the circle of strife
      And it moves us all
      Through despair and lost hope
      With hate crimes on the rise
      Till they find our corpse
      In the dumpster in the alley
      In the circle
      The circle of strife

    • MBear

      Its the circle of life, or economy…or something like that

    • dr morbius

      Yeah, “fixed” except for those of us with stagnant wages and tenuous employment. The bubble is mind-boggling.

      • bambinoitaliano

        Fixed as in recovering from trillions of dollars spent in the Iraq war, billions of tax cut and the subprime loan crisis that almost cause the collapse of the country and world economy under Bush. Perhaps you ought to step out of your own bubble and look at the bigger picture. Obama is not Moses.

  • Oikos
    • Ninja0980

      O/T but glad to see I’m not the only one who goes over to the snakepit that is Mediate.

      • Oikos

        Overrun with trolls. I block each and every time I’m there.

        • Ninja0980

          I have so many user is blocked folks on there it’s not even funny.

  • Paula

    Oh no, Ma! The payments on the mobile home is goin’ up 8 dollars a month.

    • Rex

      That’s gonna cut into the beer money.

      • Lumpy Gaga

        “Meth markets reacted strongly today…”

    • Cipher

      “Don’t worry, Junior. Trummmp ‘goin let them non-Juuu payday lenders stay open so you can afford a double-wide. Take that Obama!”

  • The_Wretched

    Well, they cut it far and hard for a long time. That’s a problem since it’s essentially shoveling free cash to the financial sector and inflates bubbles. That said, I’d be shocked if we don’t have a GDP crash soon ala the last year of Bush the Lesser’s term in the Cheney admin.

  • David Bradbury

    “Strong economy”? Um, where?

  • Lumpy Gaga
  • Oikos

    OT but a good graphic

    http://i.imgur.com/7xHaUXf.jpg

    • Rebecca Gardner

      Interesting. I stopped reading Addicting Info a long time ago because I saw it was the left wing version of Breitbart and now this graph confirmed my suspicions. What is the source of this graph?

      • Oikos

        Not sure. It is from imgur, got it from a friend today. I’ll inquire and see if I can find out.

        • beariac

          A google reverse image search led me to Wil Wheaton’s tumblr (!) and then here:
          https://www.facebook.com/vanessa.otero.9619/posts/10155006385626062

          • Oikos

            Thank you for finding this!

          • beariac

            My pleasure. I’ll reply to RG above to alert her. :)

          • Oikos

            I tried Tineye reverse search with no luck. I should have tried google.

          • beariac

            I’ve never thought to consider others, so thanks. I don’t do it that it often but usually get results, so it’ll be a useful backup. A lot of people still don’t know about it IME (and I’m no techgeek) but it’s extremely useful. It’s also one of the few times I was able to find a source or ID for a tumblr pic, though tbf those searches have been of the adult variety. hehe 😉

      • beariac
    • Treant

      Every time somebody sends me something from Natural News, I gag and die a little inside.

      • Oikos

        It is a anti vaxxer bullshit site.

    • MichaelJ

      I would move Fox News somewhat further down and a little more to the right on the graph.

      • Oikos

        Agreed.

    • beariac

      First thing I saw: Stewie crawling away over a tennis ball; I was expecting /s.

      On closer inspection and as a Brit, I’d put the BBC closer to basic af and The Guardian more left.

      It is though how people should consider their news media, but, you know, celebrities & sports & stuff are more important. /s

    • JCF

      Huh? Since when is Addicting Info as bad as mofo InfoWars???

      • Oikos

        Addicting info is a lousy source and clickbait.

        • JCF

          It’s not a source at all—it’s an aggregator. You use it to follow the links TO the sources. Clickbait? I don’t think links critical of Drumpf (and Drumpfian BIGOTRY, which I was just looking at there) qualify. Clickbait, to me, involves some 3rd rate celebrity’s T&A falling out of her clothes. [Not that I have anything in principle against T&A! ;-p]

          • Oikos

            Clickbait to me is something with a sensational header that induces the reader to click. Addicting info, PoliticusUSA, etc are clickbait usually without any substantiation for the claims made.

  • PickyPecker
  • Mark Neé Fuzz

    Why bother? The economy goes into the crapper whenever a republican is in charge. And with Trump, there’s a double whammy. A triple even.

    • Kate

      Deregulation should be good for stocks, so there’s that. We can have even more of the recovery going to the 1%.

      Hopefully it will be good for union retirement funds.

  • rednekokie

    It’s about time. Perhaps if they keep on raising the rates, my savings account will actually make some money. (but I’m not holding my breath)

  • boatboy_srq

    Tell us again, tRumpets, what a yuugely disastrous thing eight years of Obama has been….

    • Kate

      Tell that to the people who lost their healthcare to ObamaCare. Or the many, many people who found their full time jobs replaced with part time jobs.

      • boatboy_srq

        Perhaps our great-great-grandparents shouldn’t have been so eager to accept health insurance in lieu of pay increases from their employers. Oh, right, they’d have needs a union to make a worthwhile attempt at that.

        • Kate

          Yes, they would need a union. That’s why we need tariffs. If companies can make things cheaper overseas, the greedy ones will do so, and the rest will follow when their prices can’t compete.

          It would have been nice if there hadn’t been wage freezes – companies would have gotten less involved in trying to throw in everything else.

          • boatboy_srq

            What’s needed is not a means of impeding international trade, but a means of guaranteeing a living wage. Health insurance, pensions and other benefits weren’t prizes unionized workers won, but the cheaper alternatives employers offered in lieu of actual wages. For struggling enterprises, this is at least somewhat defensible: however given that these were first offered by the equivalent of Fortune 500 enterprises, which in turn have been among the first to attempt their replacement with HMOs and 401ks, the assumption that early adopters of alternate compensation are those least able to afford conventional pay is precisely backward.

            Wake freezes are relatively recent: deferred/alternate compensation is a century or more old, and it’s value has been fprgotten, especially as it is no longer perceived as value but as expense.

            The single biggest fallacy is the insistence by conservatives and neoliberals that employees are both responsible for and capable of their own financial planning. Not that the calculations and budgeting are difficult. But that the offerings are so complex, and the products offered so volatile, that too much time is required to manage them properly. Yet the alternatives (employer management and labor representative organisation management) are respectively proven untrustworthy and victims of conservative union-bashing.

            As for the ACA, you begin to understand whybthose of us who actually saw the Heritage proposal in 1993 dismissed it as unworkable even then when health insurance was a fraction of the cost it is now. What’s needed at this point is not the elimination of the ACA, but reasonable constraints on pharmaceuticals, who are using the US healthcare market as a cash cow and global proving constraints as an excuse to keep soaking both US healthcare consumers and US federal research grants. There is no moral high ground in making healthcare, especially medication, a profit center, and the highest-grossing economic segment has no room for complaint should its profits be reduced by sound public policy and revision to patent law inhibiting private ownership of publicly-originated research.

  • justme

    It only took G W 10 months to destroy Bill Clinton’s surplus and economic prosperity

  • dcurlee

    This won’t take long to go down the crapper

  • boobert

    I believe the stock market is breaking records because they know the end is near.

    • JCF

      That’s my theory: they’re running it up w/ the last lingering safety of Obama-in-Charge, in preparation to dump MADLY in late January…

      • Kate

        Or in preparation to run it up even more, when regulation standing in the way of business maximizing profits are repealed.

        It’s cheaper to make goods when you can just dump the toxic waste in the local river.

  • Ross

    The economy WAS doing well.

    I have an internet-based business, and had a good October.

    The first week of November? My sales were up 50% from the same week the year previous.

    Since election day? My sales have plummeted. I mean, scarily so. So far, this is THE worst December I have ever had.

    • Kate

      A lot of businesses have reported the opposite. It depends on the field you are in.

      Have you considered transitioning to being an arms dealer? Or, computer security? Both should be pretty lucrative here over the next 4 years.

  • JellyDonut

    give it 12 moths, the economy is guaranteed to crash

  • Mark_in_MN

    I don’t get it. The economy isn’t anywhere even near bad as the Trumpsters have been saying, but it isn’t exactly going gangbusters either. If they are going to do this interest rate manipulation thing in the first place, I think they’ve been foolish in raising it this past year. The economy doesn’t need anything to put drag on it. If anything it needs continued encouragement. But, really, I just wish they’d set it at something, say 1%, when there is actual warrant to raise it there, and just leave it alone, rather than have some group of unelected officials make such a significant decision in the governance of our country and not even be brave enough to meet openly and publicly.

  • Tom Ato

    Further evidence that Obama ruined everything.

  • JCF

    Thanks Obama!