Fed raises rates by another three-quarters of a percentage point, pledges more hikes

[Xolodno]

45. In general it raises the "price" of money.

Demand for things like homes, cars, exotic vacations, refrigerators, a nice meal at a plush restaurant go down (all which often requires some sort of financing). Auto repair, cheap entertainment, local vacations, etc. rise as they aren't in demand as much during a booming economy.

However, prices don't go down right away, they adjust slowly downward, this is called Price Stickiness.

https://www.investopedia.com/terms/p/price_stickiness.asp

There are a number of factors that can cause this; sunk costs, companies moving too slow to adjust for the lack of demand (seen it many times, they hold on to their forecasts like gold and assume it will go back to normal, most CEO's are good talkers, not economists), company could be bloated, having a hard time which projects to axe, stuck in too many vendor contracts, who they should lay off, etc.

But once it becomes obvious they are looking at losing market share to a competitor, they implement cost cutting measures and drop prices. Losing market share drops the stock price even worse than not meeting your targets.

But unfortunately, this usually results in a recession as the Fed Bank is often late to react.

We should have been slightly nudging things up under the Velveeta Former Guy, but if people remember, he pushed hard against it and I think the Fed relented.