Inflation will not fall to 2% target for two years, Fed's Mester says

Silberman

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Quote from: justdimin on July 15, 2022, 01:35:08 PM

Quote from: Silberman on July 14, 2022, 10:54:30 AM

At the end we are going to see the same we have always seen when something like this happens, politicians will protect themselves and their friends while the rest of the population will have to find a way to deal with the inflation problem which was created by the government, however if things get as bad as I think they can get then this is going to be a massive opportunity for bitcoin as there is not going to be a better scenario for bitcoin so it can get to incredible levels of adoption.

This has been the case for thousands of years and I doubt that it would ever change. I mean we look back in history and say that there were bad times and we are doing "better" but the reality is that we are not doing that much better. Just to give an example, back in the day when slavery happened, the "pay" for a slave was 3 liters of beer and bread in ancient Egypt, and a place to stay.

Let's be honest, there are many nations that do not pay people that much right now when they are not even slaves, the "freedom" we have is a lie, we do not have any freedom, we are just slaves that can't be beaten or murdered anymore, that's literally the only advantage we have, but get paid a lot less.

Without a doubt you bring a very interesting point, slavery in this day and age is way more subtle than it was back in the day but it doesn't mean that it doesn't exist, after all people buy all kind of stuff with money they do not have and that they need to repay for the rest of their lives, how can we call a person that cannot ever stop working and that most of what they earn goes to someone else? I think the most appropriate word for someone like that is a slave, which is why it is important to not fall into the traps of the governments and banks and remain debt-free.

DOH!

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Do you think that the Federal Reserve has enough power to control inflation within 2% over the next two years?

They have consistently done that by raising interest rates, but the results have been the opposite. From 8.6% given the all-time high continues to go up to an ATH of 9.1%. Lol, The state of macroeconomic recession is already at risk of red not only based on the decisions of the Fed, in other words they will not be able to control inflation in the current conditions, and I guess this situation will continue continue for the next few years.

Gyfts

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Quote from: STT on July 16, 2022, 05:59:53 PM

Quote

Do you think that the Federal Reserve has enough power to control inflation within 2% over the next two years?

If the Dollar continually rises I suppose its possible because import costs will drop and effectively inflation is exported to other nations. Ultimately the rate rises also require debt reduction and bond repurchases to reverse QE and none of that is especially possible as there is fiscal and trade deficit still remaining in close proximity. If perhaps USA were to become one of the worlds largest oil exporters, refining and raw crude to supply nations such as China or India who have billions of people but barely any oil to supply their growing GDP then it could all balance out to currency strength and low inflation.
I think we stall basically, Dollar will reflect lost value that only YEN is currently showing as their QE is far advanced of ours but its not too far away a similar situation of excess debt inability to repay only refinance which implies both weak currency and effective inflation above interest rates given.

QE was only part of the inflation, though. It was too be expected that some inflation would've occurred after the economy crashed in 2008, but COVID took inflation and spiraled it out of control. We would not have seen a near 10 percent inflation rate without the irresponsible fiscal policy post COVID. Debt is obviously an issue, but the money printing the U.S. government endorsed in 2020 and beyond, in combination with shutting down of major businesses, essentially took what would have been mild inflation and multiplied it.

There is not really an end to it without at least a recession. I don't see the U.S. changing their energy policy soon, at least not until Biden gets out of the white house so the oil strategy won't work.

STT

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Quote

Do you think that the Federal Reserve has enough power to control inflation within 2% over the next two years?

If the Dollar continually rises I suppose its possible because import costs will drop and effectively inflation is exported to other nations. Ultimately the rate rises also require debt reduction and bond repurchases to reverse QE and none of that is especially possible as there is fiscal and trade deficit still remaining in close proximity. If perhaps USA were to become one of the worlds largest oil exporters, refining and raw crude to supply nations such as China or India who have billions of people but barely any oil to supply their growing GDP then it could all balance out to currency strength and low inflation.
I think we stall basically, Dollar will reflect lost value that only YEN is currently showing as their QE is far advanced of ours but its not too far away a similar situation of excess debt inability to repay only refinance which implies both weak currency and effective inflation above interest rates given.

og kush420

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Quote from: justdimin on July 15, 2022, 01:35:08 PM

Quote from: Silberman on July 14, 2022, 10:54:30 AM

At the end we are going to see the same we have always seen when something like this happens, politicians will protect themselves and their friends while the rest of the population will have to find a way to deal with the inflation problem which was created by the government, however if things get as bad as I think they can get then this is going to be a massive opportunity for bitcoin as there is not going to be a better scenario for bitcoin so it can get to incredible levels of adoption.

This has been the case for thousands of years and I doubt that it would ever change. I mean we look back in history and say that there were bad times and we are doing "better" but the reality is that we are not doing that much better. Just to give an example, back in the day when slavery happened, the "pay" for a slave was 3 liters of beer and bread in ancient Egypt, and a place to stay.

Let's be honest, there are many nations that do not pay people that much right now when they are not even slaves, the "freedom" we have is a lie, we do not have any freedom, we are just slaves that can't be beaten or murdered anymore, that's literally the only advantage we have, but get paid a lot less.

I agree - this is going on forever.
And I assume they are talking about 2 years. But I believe it wont happen for around any time sooner.

justdimin

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Quote from: Silberman on July 14, 2022, 10:54:30 AM

At the end we are going to see the same we have always seen when something like this happens, politicians will protect themselves and their friends while the rest of the population will have to find a way to deal with the inflation problem which was created by the government, however if things get as bad as I think they can get then this is going to be a massive opportunity for bitcoin as there is not going to be a better scenario for bitcoin so it can get to incredible levels of adoption.

This has been the case for thousands of years and I doubt that it would ever change. I mean we look back in history and say that there were bad times and we are doing "better" but the reality is that we are not doing that much better. Just to give an example, back in the day when slavery happened, the "pay" for a slave was 3 liters of beer and bread in ancient Egypt, and a place to stay.

Let's be honest, there are many nations that do not pay people that much right now when they are not even slaves, the "freedom" we have is a lie, we do not have any freedom, we are just slaves that can't be beaten or murdered anymore, that's literally the only advantage we have, but get paid a lot less.

Silberman

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Quote from: virasisog on July 12, 2022, 12:06:00 PM

Quote from: Silberman on July 11, 2022, 12:42:39 PM

I think the case can be made about the actions of the governments being justified in printing that much money when the pandemic stroke, the problem is how are they going to deal with inflation levels that we are witnessing? And I have severe doubts that governments are going to be as responsible as they should be under these circumstances, because we must remember that politicians are very shortsighted and they only care about the economy not collapsing under their watch so they are not blamed for the collapse and then they can get in power yet again.

We could feel that from the government that we have in our country. They focus on the economy but they're blindfolded in the sufferings of people because of the mishandling of the economic crisis. The inflation rate here has just increased by about 6.5% this month and we have no choice but to hustle hard so we can live and survive because we can't rely on our government which only focuses on their benefit.

At the end we are going to see the same we have always seen when something like this happens, politicians will protect themselves and their friends while the rest of the population will have to find a way to deal with the inflation problem which was created by the government, however if things get as bad as I think they can get then this is going to be a massive opportunity for bitcoin as there is not going to be a better scenario for bitcoin so it can get to incredible levels of adoption.

virasisog

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Quote from: Silberman on July 11, 2022, 12:42:39 PM

Quote from: darewaller on July 11, 2022, 10:14:31 AM

It is true that 2% will not be seen for a long time, probably not in most nations as well.
I mean there could be some Swiss numbers that could shock you, but 99% of the nations will have bigger than 2% inflation rate.

But, I am not against them printing money at that time, it was a logical reason. I mean it is never a good thing, but it was a necessary evil at that time we needed and that is what we did.

Hopefully we will reach to a point where that much printed would have been done anyway so it's okay, so if we print nothing for many years, we will get there, and it will be fine. If we keep inflation to minimum, then we will be living a comfortable life "eventually", but that needs like a fiscal responsibility for half a decade easily.

I think the case can be made about the actions of the governments being justified in printing that much money when the pandemic stroke, the problem is how are they going to deal with inflation levels that we are witnessing? And I have severe doubts that governments are going to be as responsible as they should be under these circumstances, because we must remember that politicians are very shortsighted and they only care about the economy not collapsing under their watch so they are not blamed for the collapse and then they can get in power yet again.

We could feel that from the government that we have in our country. They focus on the economy but they're blindfolded in the sufferings of people because of the mishandling of the economic crisis. The inflation rate here has just increased by about 6.5% this month and we have no choice but to hustle hard so we can live and survive because we can't rely on our government which only focuses on their benefit.

Silberman

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Quote from: darewaller on July 11, 2022, 10:14:31 AM

It is true that 2% will not be seen for a long time, probably not in most nations as well.
I mean there could be some Swiss numbers that could shock you, but 99% of the nations will have bigger than 2% inflation rate.

But, I am not against them printing money at that time, it was a logical reason. I mean it is never a good thing, but it was a necessary evil at that time we needed and that is what we did.

Hopefully we will reach to a point where that much printed would have been done anyway so it's okay, so if we print nothing for many years, we will get there, and it will be fine. If we keep inflation to minimum, then we will be living a comfortable life "eventually", but that needs like a fiscal responsibility for half a decade easily.

I think the case can be made about the actions of the governments being justified in printing that much money when the pandemic stroke, the problem is how are they going to deal with inflation levels that we are witnessing? And I have severe doubts that governments are going to be as responsible as they should be under these circumstances, because we must remember that politicians are very shortsighted and they only care about the economy not collapsing under their watch so they are not blamed for the collapse and then they can get in power yet again.

darewaller

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It is true that 2% will not be seen for a long time, probably not in most nations as well.
I mean there could be some Swiss numbers that could shock you, but 99% of the nations will have bigger than 2% inflation rate.

But, I am not against them printing money at that time, it was a logical reason. I mean it is never a good thing, but it was a necessary evil at that time we needed and that is what we did.

Hopefully we will reach to a point where that much printed would have been done anyway so it's okay, so if we print nothing for many years, we will get there, and it will be fine. If we keep inflation to minimum, then we will be living a comfortable life "eventually", but that needs like a fiscal responsibility for half a decade easily.

Webetcoins

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Quote from: yhiaali3 on July 06, 2022, 02:35:32 AM

This is the biggest inflation in America in a long time. Inflation is now over 8%. This is the highest rate the country has reached since the very 1980s, so it's not at all easy for the US government to bring that down to 2% as they hope. There are a lot of factors, especially high fuel Unprecedented because of the Russian-Ukrainian war, some economic experts believe that this crisis is similar to the crisis that occurred after World War II and that the United States was able to overcome, but others believe that this crisis will continue and no one can predict how long it will last.
The Republicans accuse the Democrats of being the ones who led the country to this inflation. This means that there are political differences that also fuel this inflation. Therefore, in my opinion, inflation will continue for a long time, especially in the conditions of Corona and the Russian-Ukrainian war.

I guess that it will probably stay the biggest inflation in USA (and most nations broke their inflation record as well, at least for many decades). Why will we not have this much again? Because, this was due to pandemic. What did governments do to overcome this?

They simply printed money and distributed it to everyone. That should tell you enough about the problem, people failed to work due to pandemic and social distancing and staying at home etc etc, and that resulted with the fact that if you want government to help you out, you will save that day, but screw the next day. That's what we are living right now, and doesn't look like it will be fixed in a minute.

2stout

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Looks like for this one that the fed is going to need more than 2 years for this mess to be fixed as there are other global factors that the fed can't do much about. They must be careful not to overcorrect or correct too soon as to not trigger a recession (unofficially here) or a depression; a lot hangs in the balance.

yhiaali3

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This is the biggest inflation in America in a long time. Inflation is now over 8%. This is the highest rate the country has reached since the very 1980s, so it's not at all easy for the US government to bring that down to 2% as they hope. There are a lot of factors, especially high fuel Unprecedented because of the Russian-Ukrainian war, some economic experts believe that this crisis is similar to the crisis that occurred after World War II and that the United States was able to overcome, but others believe that this crisis will continue and no one can predict how long it will last.
The Republicans accuse the Democrats of being the ones who led the country to this inflation. This means that there are political differences that also fuel this inflation. Therefore, in my opinion, inflation will continue for a long time, especially in the conditions of Corona and the Russian-Ukrainian war.

South Park

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Quote from: davis196 on July 05, 2022, 05:32:03 AM

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Do you think that the Federal Reserve has enough power to control inflation within 2% over the next two years?
Do you think Fed can do that without causing a recession that may last for several years?

1.Yes, the Federal Reserve has enough power to stop the inflation and put it under control. A big enough interest rate hike can stop the inflation. The problem is that the politicians don't want to cut the government costs and reduce the gigantic US federal budget deficit.
This will cause the Federal reserve to restrain from big interest rate hikes, because it will become difficult for the US government to borrow money and pay debts with higher interest rates.
2.The US economy has been running on steroids for several years(money printing, stimulus packs, Trump's tax cuts). A recession might be healthy for the economy. Lots of bad businesses will go bankrupt, lots of "bullshit job" positions will get shut down. Unfortunately, the "too big to fail" banks and corporations will receive government support again.

But that is the problem, politicians never want to take responsibility for what they do, even if the healthiest thing that could happen to the economy for its long time prospects is to have a recession and for many unneeded companies to disappear, this means unemployment for a lot of people which will cost voters, local elections and maybe even the presidential elections to the party in power, and they are never going to accept something like this unless they literally had no other choice.

justdimin

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Quote from: davis196 on July 05, 2022, 05:32:03 AM

1.Yes, the Federal Reserve has enough power to stop the inflation and put it under control. A big enough interest rate hike can stop the inflation. The problem is that the politicians don't want to cut the government costs and reduce the gigantic US federal budget deficit.
This will cause the Federal reserve to restrain from big interest rate hikes, because it will become difficult for the US government to borrow money and pay debts with higher interest rates.
2.The US economy has been running on steroids for several years(money printing, stimulus packs, Trump's tax cuts). A recession might be healthy for the economy. Lots of bad businesses will go bankrupt, lots of "bullshit job" positions will get shut down. Unfortunately, the "too big to fail" banks and corporations will receive government support again.

I honestly believe that the best thing we could do right now is pressure the US government and FED to increase the rates as much as possible. If they do that, then the whole world would have to follow and do the same otherwise it is going to hurt a lot. This is why there is a good chance that we could end up with a big problem if things keep going like this, inflation can't be sustained forever.

We need it to go down a bit, maybe not 2% of course , not right away at least, but we need it to go down for sure. At the end of the day, it is all up to them, it's out of our control and we should go back to crypto, to see what we can do and that would be much better.

amishmanish

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Inflation is when the liquidity is high but supply is low. As we see the supply of essential goods has suffered greatly due to war and climate change. The option with Fed is to increase rates to make poor man suffer and bring recession. But with decentralized economic system like bitcoin. I think if not now but in future we will have a mean to fight off the monopoly of fed to regulate our money by simple rate increases.

davis196

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Quote

Do you think that the Federal Reserve has enough power to control inflation within 2% over the next two years?
Do you think Fed can do that without causing a recession that may last for several years?

1.Yes, the Federal Reserve has enough power to stop the inflation and put it under control. A big enough interest rate hike can stop the inflation. The problem is that the politicians don't want to cut the government costs and reduce the gigantic US federal budget deficit.
This will cause the Federal reserve to restrain from big interest rate hikes, because it will become difficult for the US government to borrow money and pay debts with higher interest rates.
2.The US economy has been running on steroids for several years(money printing, stimulus packs, Trump's tax cuts). A recession might be healthy for the economy. Lots of bad businesses will go bankrupt, lots of "bullshit job" positions will get shut down. Unfortunately, the "too big to fail" banks and corporations will receive government support again.

og kush420

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Quote from: Fortify on July 03, 2022, 02:08:25 PM

It would be nice to see inflation fall under that target within two years, but unfortunately we seem to be on a runaway train and nobody knows how to turn the brakes on. The fact that inflation is on this course is partly due to the reckless and extended cheap money that the Fed pumped into the market for over a decade, which was further topped up during Covid. It'll be interesting to see whether it is a slow and steady wind down, or a disorganized economic crash, but you should be careful putting any faith into the predictive abilities of the fed, because they are often reactive instead of proactive - they go with whatever is the most convenient policy of the current day instead of the best for long term health.

I believe the next two years will be very difficult. Neither the prices are coming down - nor the inflation will be in control.
If we believe things will get better sooner. Than we are only fooling ourselves. The time is very tough - I am not sure how the poor people will be managing their finances.

Fortify

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Quote from: Husires on June 20, 2022, 06:57:26 AM

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WASHINGTON (Reuters) -Cleveland Federal Reserve Bank President Loretta Mester said it will take two years for inflation to fall to the central bank's 2% target, adding that it will be "moving down" gradually from the current level.

A surge in inflation, which is at its highest level in 40 years, has made hawks of nearly all Fed policymakers, only one of whom dissented earlier this week against what was the central bank's biggest rate increase in more than a quarter of a century.

"It isn't going to be immediate that we see 2% inflation. It will take a couple of years, but it will be moving down," Mester said in an interview with CBS News on Sunday.

Mester said she was not predicting a recession despite slowing growth.

"We do have growth slowing to a little bit below trend growth and we do have the unemployment rate moving up a little bit. And that is OK, we want to see some slowing in demand to get it in line with supply," Mester added, referring to forecasts submitted in the past week by participants of the Federal Open Market Committee's meeting.

Policymakers currently expect to raise the Fed's benchmark overnight interest rate, now in a range of 1.50%-1.75%, to at least 3.4% in the next six months. A year ago, the majority thought the rate would need to stay near zero until 2023.

On Friday, the Fed called its fight against inflation "unconditional."

Source: https://www.investing.com/news/economy/feds-mester-says-it-will-take-2-years-until-inflation-falls-to-2-target-2838671

Do you think that the Federal Reserve has enough power to control inflation within 2% over the next two years?
Do you think Fed can do that without causing a recession that may last for several years?

Inflation that is happening now is linked to several factors that the United States may not be able to move well, so Fed should be careful about monetary policy, analyzes indicate an interest rate of at least 3.4% in the next six months, which means more rate hikes of about 50 basis points each meeting in the coming months.

It would be nice to see inflation fall under that target within two years, but unfortunately we seem to be on a runaway train and nobody knows how to turn the brakes on. The fact that inflation is on this course is partly due to the reckless and extended cheap money that the Fed pumped into the market for over a decade, which was further topped up during Covid. It'll be interesting to see whether it is a slow and steady wind down, or a disorganized economic crash, but you should be careful putting any faith into the predictive abilities of the fed, because they are often reactive instead of proactive - they go with whatever is the most convenient policy of the current day instead of the best for long term health.

teosanru

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Quote from: Husires on June 20, 2022, 06:57:26 AM

Quote

WASHINGTON (Reuters) -Cleveland Federal Reserve Bank President Loretta Mester said it will take two years for inflation to fall to the central bank's 2% target, adding that it will be "moving down" gradually from the current level.

A surge in inflation, which is at its highest level in 40 years, has made hawks of nearly all Fed policymakers, only one of whom dissented earlier this week against what was the central bank's biggest rate increase in more than a quarter of a century.

"It isn't going to be immediate that we see 2% inflation. It will take a couple of years, but it will be moving down," Mester said in an interview with CBS News on Sunday.

Mester said she was not predicting a recession despite slowing growth.

"We do have growth slowing to a little bit below trend growth and we do have the unemployment rate moving up a little bit. And that is OK, we want to see some slowing in demand to get it in line with supply," Mester added, referring to forecasts submitted in the past week by participants of the Federal Open Market Committee's meeting.

Policymakers currently expect to raise the Fed's benchmark overnight interest rate, now in a range of 1.50%-1.75%, to at least 3.4% in the next six months. A year ago, the majority thought the rate would need to stay near zero until 2023.

On Friday, the Fed called its fight against inflation "unconditional."

Source: https://www.investing.com/news/economy/feds-mester-says-it-will-take-2-years-until-inflation-falls-to-2-target-2838671

Do you think that the Federal Reserve has enough power to control inflation within 2% over the next two years?
Do you think Fed can do that without causing a recession that may last for several years?

Inflation that is happening now is linked to several factors that the United States may not be able to move well, so Fed should be careful about monetary policy, analyzes indicate an interest rate of at least 3.4% in the next six months, which means more rate hikes of about 50 basis points each meeting in the coming months.

Inflation is not something that changes so suddenly so if there is 7-8% in one year chances are it will decline quite slowly and then comes to a subtle number and stabilizes on to something . Currently we are in situation where the inflation would rise as the money supply is rising continuously and there is no signs of some great economic growth along with that. But Fed can do that only by ensuring there is enough GDP growth so that there are enough people in the economy to absorb inflation.

Topic: Inflation will not fall to 2% target for two years, Fed's Mester says (Read 521 times)