If people had difficulty buying houses with low rate,

Mommy

Sun, Jun 19 2022, 9:47 pm

Depends why they’re selling. Is it because they’re desperate to move or they want to get the most for their money? Ppl who really need to move (because of lack of space etc.) will move, but anyone who isn’t desperate will probably stay put. For people who want to buy a house, there will probably be less options to choose from because of this.

nylon

Mon, Jun 20 2022, 8:01 pm

The Fed is independent--that's the whole point--so this decision would happen regardless of who is president.

The housing market is overheated, and calming it is important. There's a case to be made that the Fed waited too long to raise rates. Yes, it's hard on homebuyers, but so are skyrocketing prices. Americans are very lucky to have 30 year mortgages and to be able to refinance them later--in most countries you can't lock in the rate for more than a few years.

amother

Mon, Jun 20 2022, 10:23 pm

nylon wrote:

If a Republican gets elected Pres in 2024. his hands would be tied? He couldnt change anything?

Laiya

Mon, Jun 20 2022, 10:58 pm

amother [ OP ] wrote:

If a Republican gets elected Pres in 2024. his hands would be tied? He couldnt change anything?

If November brings a Republican congress, the expectation is that they would pass legislation to reopen the pipelines. Bringing down gas prices would be a good first step.

Rubies

Mon, Jun 20 2022, 11:01 pm

nylon wrote:

Not only that, the fed is comprised of private individuals who profit from their own policies.

NotInNJMommy

Tue, Jun 21 2022, 8:52 am

shoshanim999 wrote:

I agree with half of what you said.

Higher rates will lower inflation because it will lessen demand as people won't be able to afford expensive housing at higher rates.

Higher rates will also contribute towards a recession for a few basic reasons.

1. Businesses will be reluctant to borrow, and expand (and hire) because it will be more expensive to do so. What's more is that unemployment will start ticking higher as businesses let go of workers no longer needed as demand lessens.

2. People and especially homeowners will be reluctant to borrow and spend money for the same reason. People who would have tapped equity for a housing project, vacation, or another big expense might decide they can't afford it anymore.

Unfortunately many feel (and I agree) that we need a recession to fight this raging out of control inflation. Demand will be severely lessened because the country as a whole will be poorer. It will likely happen, and in fact has no doubt already started.

I'm basing my comments on a very useful overview on The Daily podcast last week covering how this all works, presented by economists. I also said prevent or mitigate/minimize.

I think it's a foregone conclusion there will be a minor recession. This is stave off something more staggering.

Most of these financial things can soften dramatic economic swings, but not eliminate them.

amother

Tue, Jun 21 2022, 9:29 am

shoshanim999 wrote:

Demand will be severely lessened because the country as a whole will be poorer.

Whats scary about this is how this will effect emotional health/depression and crime, when the country is already in very bad shape in both emotional health/depression and crime.

amother

Peachpuff

Tue, Jun 21 2022, 9:52 am

Rubies wrote:

Not only that, the fed is comprised of private individuals who profit from their own policies.

Whoa, that's a serious charge! Do you have a source for this? Any proof or examples of Fed governors making money based on the interest rate levels they set? If not, such cynicism and public mocking is quite inappropriate.