Sanders blasts Fed over interest rate hike
Source: The Hill
By Peter Schroeder
Sen. Bernie Sanders (I-Vt.) blasted the Federal Reserve on Wednesday for raising interest rates for the first time since the financial crisis.
The presidential candidate called the Fed's move bad news for working families, and argued it needed to be doing more, not less, to boost the economy.
At a time when real unemployment is nearly 10 percent and youth unemployment is off the charts, we need to do everything possible to create millions of good-paying jobs and raise the wages of the American people, he said in a statement. The Fed should act with the same sense of urgency to rebuild the disappearing middle class as it did to bail out Wall Street banks seven years ago."
The Fed announced Wednesday that it would raise interest rates by 0.25 percent, its first rate hike since 2006, and the first time rates moved from near zero since the end of 2008.
FULL story at link.
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Read more: http://thehill.com/policy/finance/263479-sanders-blasts-fed-rate-hike
bluestateguy
(44,173 posts)nt
VanillaRhapsody
(21,115 posts)bluestateguy
(44,173 posts)nt.
VanillaRhapsody
(21,115 posts)why shouldn't we just pay banks to take loans???
Omaha Steve
(99,962 posts)http://a.cpdaction.org/page/s/shame-on-the-fed?source=facebook
For the first time in nearly 10 years, the Federal Reserve has decided to raise interest rates. This decision signals that the Fed thinks the economy has fully recovered and that we need to put the brakes on economic growth.
Over the past year, we've met with the Fed urging them to keep interest rates low until wage growth, especially for communities of color, has picked up. And for a long time they've listened.
Now that the Fed has raised rates, Big Banks and hedge funds will continue to press them to keep going and keep raising interest rates over the next year.
But we're prepared to ramp up our pressure on the Fed by continuing to insert the voices of millions of low-wage workers into the Fed's Decision. Your voices helped stave off an interest rate hike for more than a year and, if we keep up the pressure, make the Fed more responsive to the needs of working families.
Sign our petition now to tell the Fed: Shame on you! Don't leave low-wage workers behind in the economic recovery.
snooper2
(30,151 posts)Let's just keep it at 0 forever, just lock it in and see how that works out
yeoman6987
(14,449 posts)We barely get squat for our money in banks now and you want them to take money every month?
Yupster
(14,308 posts)who live on their cd interest.
If rates go up a little, that extra money will show up in restaurants and shoe stores, etc.
Rates have been too low for too long. When the economy goes back down, we'll want to cut rates again. Can't do that if they're already at zero.
DesertFlower
(11,649 posts)Yupster
(14,308 posts)Should interest rates go up 3 %, 3 % of $ 19 trillion is $ 570 billion a year.
We don't happen to have an extra $ 570 billion in the budget right now to pay interest costs.
brooklynite
(95,163 posts)...good for Union pension plans.
DirtyHippyBastard
(217 posts)still_one
(92,595 posts)this increasing the interest rates will not be hurried, and there will be a lot of wait and see invade the need to fall back
Based on Bernies statement in the OP I really question if he even understands the purpose of the fed
DrToast
(6,414 posts)1/2 percent is still extremely accomodative. The Fed needs to try to match monetary policy with the business cycle. We've had 0% rates for 7 years.
joshcryer
(62,287 posts)But I know what Yellen is doing. Her party needs to retain power, so she needed to act as sooner rather than later that way if there were problems they can dial it back. The panic over Japanese style deflation is overblown, but what can ya do.
Agnosticsherbet
(11,619 posts)joshcryer
(62,287 posts)The length of time really has nothing to do with whether or not they should go up. They should not rise until inflation is in danger of overshooting the target.
Even then, the zero lower bound means they should probably wait even longer than "normal". It's relatively easy to get 2.5% inflation down to 2% via monetary policy. It's nearly impossible to get 0% up to 2% via monetary policy....which is the reason rates have been unchanged for 7 years.
still_one
(92,595 posts)jeff47
(26,549 posts)Both the official inflation numbers and the independent billion price index show that inflation is WAY below the 2% target. The target is what the Fed is supposed to be concerned about. Not "but rates have been low for so long{/i]!!!"
joshcryer
(62,287 posts)OilemFirchen
(7,143 posts)Keynes never advocated for no interest.
Do you agree with the poster above, suggesting negative rates?
joshcryer
(62,287 posts)Given that the Congress has no desire to deal with the fiscal side of things the Fed's hands are tied and this is obviously the only move that they can make. The better solution would be for the government to enact stimulus, but the votes aren't there.
My comment about low interest rates and Sanders is a riff on the statement, "We are all Keynesians now."
There's a reason the rates have been so low and I personally don't see a reason not to keep them going for a while longer. But I understand why Yellen is doing it. (In part because we're looking at a seasonal uptick in jobs so it may also buffer the impact.)
jtuck004
(15,882 posts)while screwing over the people with an austerity program that leaves tens of millions in poverty and tens of millions more in a permanent status of working poor for the rest of their, and their children's, lives.
I'm pretty sure he would have tilted the balance the other way. Which is what this pathetic increase does. But it does nothing to invest in the people, so it is mostly only good or bad relative to really wealthy people who make income from the labor of others.
joshcryer
(62,287 posts)Your amazing ability to quote my post verbatim is beyond impressive.
So you're saying Sanders is wrong?
Keynes wrote an entire book on interest rates. You might want to look it up.
jtuck004
(15,882 posts)if there was anything else except your opinion (which, based on my cursory examination of your postings it seems you value above that of anyone or anything else) to back that assertion up.
Yes, I think President Sanders is our only hope, and keeping it low helps mostly the very wealthy. Opposing it being raised helps the opponents of economic equality. Needs to be equalized and tens of trillions invested in the people and the country, and we need conversations about how we can go forward in an economy where we don't have half a world to blow up and profit from rebuilding.
"The struggles of the poor in the United States are even starker than those of the middle class. A family at the 20th percentile of the income distribution in this country makes significantly less money than a similar family in Canada, Sweden, Norway, Finland or the Netherlands. Thirty-five years ago, the reverse was true."
http://www.nytimes.com/2014/04/23/upshot/the-american-middle-class-is-no-longer-the-worlds-richest.html?_r=0
That's just one, but there are years of this shit.
It's nothing but status quo, and that isn't working for a growing number of people here . More like being showered with greasy, wormy, fatty scraps.
joshcryer
(62,287 posts)Keynes was for low interest for recovery. The question is whether you agree we've recovered enough to bring it back up. I'm with Sanders and I do not think we have recovered enough.
BTW, nice barb, but you're really on the wrong side here. I'm not your enemy, though you wish to make me so.
jtuck004
(15,882 posts)giving them advantageous interest rates, with which they can screw working people, was a way to grow a nation.
He said the money needed to stimulate demand, not provide profits for people who hoard wealth. Thus it needed to be placed into the hands of the people, via work programs, public infrastructure, or, as it turned out, jobs to blow stuff up or jobs to build and sell the stuff that was made.
Not bonus checks for people who steal homes and take people's assets so they die in poverty.
We may be on the same side, but I think we are holding different signs. That's my fault. I probably wasn't watching where I was going.
joshcryer
(62,287 posts)My original quip about Keynesian interest rates was that Sanders was invoking the Keynesian approach. Low interest rates, high stimulus. Wait for recovery and once it settles you can hike it back up again. He wrote an entire book on the subject. And we've been following that path.
The problem is, as Sanders notes, we're hiking without stimulus. It's a plan for disaster. Maybe I'm being overly cynical and they can micromanage the microeconomics. Who knows. We'll see. The terrifying prospect is that if the economy is in the shitter come November the Republican has a good shot to win the thing.
still_one
(92,595 posts)joshcryer
(62,287 posts)Or do you agree with Sanders we still have some recovery to do?
still_one
(92,595 posts)her comments, and the unprecedented press conference she gave. She used the word gradual multiple times, explaining this allows the fed to back off and fall back if needed.
His comments were all over the place based on the OP. He was just throwing random sound bytes
He surprised me regarding his criticism of the quarter of a point increase in the fed funds rate, and his ramblings really make me question if he really understands the purpose of the federal reserve
joshcryer
(62,287 posts)And that the idea of micromanaging the microeconomy is workable.
But Sanders wanted to use the opportunity to express the idea behind low interest when recovering and stimulus.
It may not appeal to a lot of people.
I liked it and I don't think it's controversial. But I tend to be a reductionist and I can read in to what he is doing.
Zynx
(21,328 posts)the economy is in a period of slack and higher when the economy is growing in order to smooth out the business cycle. The same applies with fiscal policy. He wanted loose policy when the economy was struggling and tight when it was growing. It wasn't that you should just be accomodative all the time.
joshcryer
(62,287 posts)And I didn't argue that the rate should be perpetually low and neither did Sanders.
comradebillyboy
(10,194 posts)401k or other similar investment. I am happy to see the interest rate hike because it is a big benefit to my retirement savings..
1StrongBlackMan
(31,849 posts)Depends on policies that put $ in consumers' hands, i.e., retirees, working class folks fortunate enough to be able to save.
saturnsring
(1,832 posts)Tote Life
(72 posts)Response to Omaha Steve (Original post)
turbinetree This message was self-deleted by its author.
BadgerKid
(4,566 posts)Right message, wrong tree.
OilemFirchen
(7,143 posts)"... real unemployment is nearly 10 percent...".
No it's not; rather, we're approaching full employment. What "genius" would advocate for a flat economy under such circumstances?
GOLGO 13
(1,681 posts)If this backfires they'll bring it right back down again.
Octafish
(55,745 posts)Now, We the People are supposed to sacrifice so Wall Street can pay bonuses to the banksters who ripped us off to begin with.
still_one
(92,595 posts)Last edited Wed Dec 16, 2015, 11:15 PM - Edit history (1)
the Feds on this
For one thing it was only a quarter of a point. Obviously he didn't listen to the statement from yellen.
it will be extremeluy gradual, and will fall back if the economy has a set back
that he fails to grasp why keeping interest rates at 0% indefinitely is not prudent, really makes me question his financial judgement
Ironically what he fails to grasp is the ones who the 0% interest benefits most are the 1%
MadDAsHell
(2,067 posts)What is he thinking?
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