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The [FedWatch probabilities table](https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html) says there’s a good chance they’ll start cutting rates around the June FOMC meeting
That chart has been predicting rate cuts since Jan 2023, and they still haven't arrived yet lol. The chart is pretty useless, tbh. It's really just a sentiment of what the market wants, it hasn't been useful at all in predicting rate cuts over the past 1.5 years.
Yes, pause here is really bullish. The longer the economy can digest these rates (which are historically still quite low and are imo a reasonable place to chill), the better off we will be.
I think a lot of the recent run in stocks and crypto can be attributed to the fact that we hiked from 0 to 500 bps extremely quickly and nothing has broken yet
you have absoltely no clue what you are on about, show me a time in history where interest rates going down was good for markets, show me a time in history interest rates went down by choice and it ended well (rather than having to drop them like 99% of instances)
You are convoluting a million different factors, but in general, when interest rates are higher, people park their money and take guaranteed returns. When interest rates are lower, they invest their money in stocks, crypto, etc.
Every single time there was a rate cut, crypto pumps and every time there was an increase it tanked. I have no idea what you are looking at. It happens at the exact moment the announcement is made every single time. If you need an example, look at yesterday.
I agree with what you said. But I would also consider an strange scenario. Probably when the rates are cutted, the market probably would have that already accounted by going up the days or weeks previous to the cutting day, resulting in a "sell the news" event when the rates are cut, making it going down for a few days
Isnt it usually in the short term cutting is bad because it shows weakness in the economy. The cutting and QE usually leads to risk on markets coming back in the longer term.
rate cuts yeh, QE it depends where inflation is doesnt it and how stupid the fed are, if inflation is at target QE is fine if its not too much. if its not at 2% then they either dont do QE or they do and cause inflation again kicking the can down the road to go through all this again
This year is election year and there will be many lobbysts who want the fed to cut rates just so biden can brag about the narrative and make life easier for people.
And before anybody tells me that the fed is not relevant to the election, be honest with yourself. Politicians always know each other
What are you even going on about? Cutting rates directly means companies and banks can borrow money, this enables liquidity and they hire and build more projects and people can buy property, of course its good for the markets lmao.
Cutting the rates would signal that the economy is going to run hotter as there will be more money floating around and growth. The rates getting cut won’t be because the economy is bad but rather because inflation is under control. I’m much more likely to borrow money if the rates are lower, and so is everyone else. That means a rate decrease is a strong signal that money will be flowing through the economy.
I feel like "nuh uh" isn't an appropriate response here if you're trying to make a point. Comparing 30 year fixed rate interest rates vs the DJI since 1970 side by side would imply that usually, lowering of interest rates coincides with gains in the market (not a perfect correlation but a reasonable one). I don't see nearly as much of a trend the other way.
Do you have some data or research to share along your point?
Or 2009 through 2013. Or 1981 through 1987. In fact, looking at an interest rate [chart](https://fred.stlouisfed.org/series/MORTGAGE30US) it's pretty easy to conclude that falling interest rates are good for markets and the general economy. That's probably why Wall Street is obsessed with the idea.
Of course the above comment specifies "by choice" which lets him easily explain without evidence that all those cases were not "by choice," even though all of them were decisions by the Fed.
hmmm lets see they didnt raise rates due to inflation they tried to come off 0%, never been done in history before, and they caused massive inflation. is was QE that pumped the markets not rate cuts, explain how they do QE with inflation about 2% target
When rates go up, stocks (and alternatives) go down.
1. Cost of opportunity is bigger, and cash flow is discounted by a higher rate, therefor stocks are worth less
2. You could invest risk free at 5.5%, or put it in a stock and pray. A lot of money flows out of stocks and into T-bills when rates are up because of this - risk management -.
And they should go even more nuts if rates go down. Nobody’s saying high rates limit the stock markets. We’re saying that a change in rates has a direct and immediate effect on stock price. What happens 2 months after the rate movement is already a different issue.
Man, Im an economist. I spent 4 years studying financial and economic history. When Powell announces a rate hike, cut or otherwise, the stocks react in a very particular manner.
There is still trillions of dollars in money markets so on the sidelines because of the juicy 5% rates. Once rates are cut, i reckon they will start moving to stocks and this will trickle to crypto.
But, i also reckon that there will be some substantial dip once JP announces cuts as this is what has happened historically as you say. I hope it is just some short term stuff like COVID was
lol 🤣, how do you think rate cut happens? You think someone point some fingers at bankers and tell them to lower the rate ? All rate cuts happens indirectly through buy and selling of bonds between reserve bank and commercial banks
Unemployment low, inflation ticks up, and the economy is doing decent. This is terrible policy by the Fed but perhaps they are just doing it to decrease debt service costs for the govt.
Will be good for assets in the short term but is terrible policy.
this bull run will get cut short, and it wont go anywhere near these moonboy targets. around 100k is the max i can, i saw around because we could go past it to suck everyone in. the yield curve has been inverted for 21 months, the longest time in history was 22 months. can we go for longer? sure but i would be taking each month as it comes and expecting an uninversion any day
Corelation doesn't have to mean causation.
This time rates get cut because the highest for 3 decades inflation is in hand, not because the economy needs help. So more cheap money in the market is bullish.
Actually, cutting rates to nearly zero was a stupid idea. Giving away home loans meant people at the beginning of the world lockdowns spent their savings on property, which drove the demand, thus values right up.
Then landlords got in on the milking it with some nations like Australia offering a Moratorium on rental payments should a lessee be unable to make said payments. (This meant that for a certain period of time, no penalties could be introduced to the lessor if rent wasn't paid.)
Those who could continue to pay their rent normally were reminded to do so, because they would be paying the arrears in the end. I got smart with this and kept paying mine, so there was never a problem.
Sadly, some could not, and those few who could have, did not, and that drove mortgages up on already mortgaged homes by landlords, since they needed to keep payments going. Up goes the money demand, and interest rates did not reflect this.
Fast forward to now and you've got corporate greed (which started on the shortages - thanks China and the TP supply shortage for a minute) capitalising on everything because the "rents were going "up" so "cost of living had to go up".
This knock on effect has sucked the economy dry for some (myself included), and it really was all to do with interest rates going the wrong direction during a time of high lending demand and low building supply due to restrictions.
The smart thing to so when inflation strikes is to lift interest rates so less money is available to spend, thus stifling demand, and keeping prices hikes on hold. The RBA rate here is currently 4.35% and I believe it should be at least 2% higher right now, and should never have been allowed to drop to around 0.1% during the height of the pandemic.
*I am not an economist, but I smart enough to see how this has happened in my local economy.*
On top of that I’m sure a lot of mortgage lenders also still made out like bandits just by offering forbearance at the time. As far as I noticed they all seemed to still be charging interest on deferred loans during those periods(no surprise there)
In Europe it was even worse
The rates were going negative and the plan was to actually keep lowering them further
They even had a solution for the bank runs cause why would someone keep their money in the bank with negative interest rates
And the solution (iirc it was proposed by IMF) was that the cash would devalue proportionally with negative interest rates on deposits
Say the interest rate on deposit is negative 1%. And the price of milk is 1€
In the current year the milk would cost 1€ for both electronic and cash transactions. But after one year, the milk payed with electronic transfer would still be €1. But the same milk payed with cash would cost 1.01€
And if you tried to convert cash back to digital euro you would get €0.99 for your 1€ of cash
This way you couldn't escape negative interest rate even if you withdrew your money from the bank
How crazy is that
It is nuts. As I said I think keeping the interest rate at around 6-7% at the IMF/RBA level is healthy. It's higher than CPI, so that will discourage not-smart lenders from buying. The sad side is if you have one or two rentals and use the rent as a subsidy to your payments, you can do rather well.
It's easy to raise them far beyond CPI and realistic "to-shelf" costs and report record profits in a time of high inflation.
They can fucking drop them. Our nation's duopoly is under fire from the Government about this very thing right now, that prices have been hikes *far beyond* anything reasonably above CPI over the last couple of years.
Yeah if it works. Then its good. The problem is they have trapped people in this loan rollercoaster, becasue people couldnt afford.
When my parents where Young they could buy a apartment for 1 yearly wages, today its 3 yearly todays wages.
That's actually cheap. In the 80s the economy was similar to what yours is now, now a house is ten to fifteen yearly wages without interest, which would add another ten. The biggest issue is saving for a deposit, which in this crisis means that personally I can get one organised in around, thirteen years.
Pausing rate cuts is definitely bullish. However, cutting rates has been soon followed by a crash / recession 2/3 of the time. This is by design.
This is not an opinion, but a fact. You can go and confirm yourself. The other 1/3 is the so called soft landing they speak of. Those are your odds. Do with it as you will.
Rates were cut in response to (impending) recession, not the other way around. There is a world in which rates are cut not in response to recession, but in response to the fact the US government can't afford to pay the interest, despite the economy doing just fine. This is not really related to those past data points, but is what I expect to be the most likely case.
CBDC [pros](/r/CryptoCurrency/comments/1bk4t5u/the_fed_not_cutting_rates_now_is_more_bullish/kvvppci/) & [cons](/r/CryptoCurrency/comments/1bk4t5u/the_fed_not_cutting_rates_now_is_more_bullish/kvvppx3/) with related info are in the collapsed comments below.
#CBDC Pro-Arguments
Below is a CBDC pro-argument written by cryotosensei.
> The typical retail investor may assume that Central Bank Digital Currencies (CBDCs) are a high-brow concept that is still in the conceptualisation stage and will only take effect in the future. However, according to Atlantic Council, ten countries have fully launched CBDCs, the most prominent of which has to be the digital yuan, also known as e-CNY, that was launched in China and continues to make superb inroads into consumers’ payment habits. The IMF also noted in a speech in February 2022 that about 100 countries are currently exploring CBDCs in one way or another. Hence, CBDCs may well become as ubiquitous as fiat currency. Just what are the advantages of CBDCs?
>
> 1. CBDCs are backed by the central bank, so they are recognized as legal tender and can be used as a payment app. Besides the peace of mind afforded to citizens, CBDCs come in handy during periods of economic downturns because central banks can deploy them quickly to give out stimulus checks to the lowest-income groups who need government handouts the most.
> 2. CBDCs are distributed through commercial banks. This alleviates the problem of too much disruption to the financial system.
> 3. CBDCs help unbanked populations get access to money and be included in their nation’s financial systems. Take for instance Jamaica, in which 17% of the population are unbanked. Since mobile phone use in Jamaica is pervasive, the authorities’ launch of a CBDC called Jam-Dex will help unbanked Jamaicans get paid electronically since they can access it via a banking app on their phones. The same can be said of the Bahamas, which launched the Sand Dollar in October 2020 to reach out to its unbanked population.
> 4. CBDCs provide cost savings. One reason why Jamaica piloted its Jam-Dex program in the first place was the substantial cost (more than $7 million) incurred in replacing dollar notes of all kinds. Removing all transaction costs problems associated with cash will thus save government agencies and business enterprises money.
> 5. CBDCs bolster resilience to the domestic payments market. In China, AliPay and TenPay/WeChat Pay dominate the mobile payments market. Should the private enterprises governing these mobile payments suffer a huge hit to their vitality, the repercussions on the mobile payments system could be far-reaching (and aggravated if there are no safety nets in place). The incorporation of the e-CNY was aimed to act as a backup to AliPay and TenPay/WeChat Pay.
> 6. CBDCs facilitate cross-border remittances at a low cost. Cambodia launched its CBDC, Bakong, in October 2020. Since many Cambodians work overseas in Malaysia, the National Bank of Cambodia collaborated with Malaysian commercial bank, Malayan Banking so that Cambodian migrant workers in Malaysia could send money to their loved ones without hassle.
> 7. CBDCs act as a safeguard against the illicit use of money. The Bahamas did not have a robust Anti-Money Laundering/Combating Financing of Terrorism framework and was flagged out to undergo extra monitoring under the Financial Action Task Force list in 2018. Following its introduction of the Sand Dollar, the Bahamas was taken off the list in December 2020.
> 8. CBDCs is a safer option compared to stablecoins, which are largely unregulated and pose risks to the financial system. The recent collapse of the algorithmic stablecoin, UST underscores this point.
> 9. CBDCs ensure monetary sovereignty. Particularly, the United States would be concerned if global citizens start adopting a stablecoin or a foreign CBDC en masse, thus leading to the possibility that the U.S. dollar might not remain the world’s favored payment mechanism. This explains why President Joe Biden signed an executive order in March 2022 that focused on the exploration of a U.S. CBDC.
*****
Would you like to learn more? Check out the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_CBDC) to find submissions for other topics.
#CBDC Con-Arguments
Below is a CBDC con-argument written by Nostalg33k.
> # CBDCs are the worst possible outcome for our societies.
>
>
>
> CBDCs or Central Bank Digital Currencies are a very bad idea. While government planning can be a good thing, the problem with CBDCs are multiple and none should be underestimated:
>
>
>
> # 1) Tracking money, free will and consumption.
>
>
>
> In a world with CBDCs, the data collection would allow government to use ultra specific ads targeted to the individual in order to push them towards certain behaviors. The tracking of money would allow the government to have an eye in your personal finances.
>
> # 2) A good government ?
>
> A good government is required for CBDCs to work, the problem is that a good government is one of the hardest thing to achieve and the requirements may vary. An example for our platform is: would you trust the Chinese government to manage a CBDC or the Talibans ? I don't think so.
>
> # 3) What about the forgotten people ?
>
> With the expansion of NIMBY minded-people, we think less and less of homeless people. The problem with CBDCs is that they are pushing us towards a cashless society. People living through scraps of coins from pan handling would die off. A society which hasn't resolved the Homeless problem should not be introducing CBDCs and other steps towards a cash-less society.
>
> # Conclusion:
>
> CBDCs may be one of the most powerful financial tool ever created BUT they are also a doubled edged sword. One should be very careful when trying to introduce it and their introduction without consent from the population could lead to uprising and other troubles.
*****
Would you like to learn more? Check out the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_CBDC) to find submissions for other topics.
You have to ask yourself...in what situation would they cut rates. It's when things are "going bad", so it's not the best time when rates are being cut
The year after btc halving is usually better than the halving year, correct. But history doesn't always repeat exactly but rhymes.
2023, the year before the halving was actually very good. So maybe we are a year advanced this time?
Whenever the fed turns hawkish all markets are going to get smashed. Doggy coins and buttcoins especially
What is the hype behind this bull run? Ai in stock markets but in crypto most of the ai coins are hype. What else do we have now that we didn't in 2021? Ordinals ? Layer 2, depin? . Besides degens betting on the next meme coin I don't see it yet
The only difference is see is the the ripple case has provided a smidgen of clarity.
But under this bull run being based on UTILITY.
Once clear laws are passed, it will be an explosion if using things for their intended purposes.
And then the projects that DO SOMETHING will get their time to shine.
Its weird how risk-on investors like crypto buyers are excited for rate cuts. Rate cuts are a signal that the economy is in distress and needs governme t assistance to correct. That's /bad/ news for risk assets.
Sign me up for refinancing my mortgage at lower rates, but I'm not excited for our government to publicly admit the economy is in need of its help.
[https://fred.stlouisfed.org/series/FEDFUNDS](https://fred.stlouisfed.org/series/FEDFUNDS)
When you look at this chart (slide the left slider to around year 2000) it makes me think recession is inevitable by summer.
Maybe that's why the fedwatch tool won't give in on rate cuts, they think things will break by then?
Nope, wrong. The federal reserve cuts interest rates *only when* something breaks i.e. unemployment begins to increase even further. They are keeping rates higher for longer to continue to drain liquidity from the economy and to tame inflation. They will cut rates when they feel like they have achieved their target inflation rate of 2% and liquidity has been sufficiently drained.
* March 2020 - Fed cuts rates from 175 basis points to 0 when C19 emergency declared. S&P tumbled 30%.
* Sept 2008 - Dec 2008 - Fed cuts rates from 200 basis points to 0 during GFC. S&P fell 43%.
Tell me again how cutting rates is a good thing? Don't spread misinformation if you don't have anything to back it up. OP is a moron /u/derika22.
he wont cut rates,
if he was he would have said so, "we are expecting" and "we will see how it goes" bullshit
he knows he cant cut rates this year because he has been fucking lying all along about the inflation rate, bet its much higher
he doesnt give a fuck anyways all he has to do is wait out the elections
What are you talking about. The Fed’s base case is for 3 rate cuts this year. That’s why the market rallied yesterday. He doesn’t make up the inflation rates, not sure how he can be lying about it. Maybe you don’t trust the data coming Bureau of labour statistics about inflation, but that’s up to you.
If Trump wins, he wont stay FED chair...Jerome will make anything possible to please the the market and increase his chances to stay.
Trump said in some interview that if elected, he will make sure someone else will be chair of the FED
Are you new here? Look around a bit and then tell me you think the average person actually USES the brain they have. I know I don’t half the time. Especially once I enter my crypto mindset.
I agree with all of that, for sure. The lower the voter turnout, the better chance trump has though. If everyone just assumes he can’t win and doesn’t vote, then he absolutely could win.
If every woman forgets about their bodies. Then yes, maybe he has a shot.
But you’re talking about a 10% chance.
This guy is hated by 70% of the country.
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The [FedWatch probabilities table](https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html) says there’s a good chance they’ll start cutting rates around the June FOMC meeting
Yes that is wall street consensus. Thanks for the link
That chart has been predicting rate cuts since Jan 2023, and they still haven't arrived yet lol. The chart is pretty useless, tbh. It's really just a sentiment of what the market wants, it hasn't been useful at all in predicting rate cuts over the past 1.5 years.
Thanks for this resource!
Who cares, i just dca
Yeaah enit fuck it 😂
Fuck the fed, get moons
Yes, pause here is really bullish. The longer the economy can digest these rates (which are historically still quite low and are imo a reasonable place to chill), the better off we will be. I think a lot of the recent run in stocks and crypto can be attributed to the fact that we hiked from 0 to 500 bps extremely quickly and nothing has broken yet
you have absoltely no clue what you are on about, show me a time in history where interest rates going down was good for markets, show me a time in history interest rates went down by choice and it ended well (rather than having to drop them like 99% of instances)
You are convoluting a million different factors, but in general, when interest rates are higher, people park their money and take guaranteed returns. When interest rates are lower, they invest their money in stocks, crypto, etc. Every single time there was a rate cut, crypto pumps and every time there was an increase it tanked. I have no idea what you are looking at. It happens at the exact moment the announcement is made every single time. If you need an example, look at yesterday.
why have stocks rallied to new ath then when rates are high
Because people expect rates to go down. You don't invest in events after they happen you invest in what you think will happen.
I agree with what you said. But I would also consider an strange scenario. Probably when the rates are cutted, the market probably would have that already accounted by going up the days or weeks previous to the cutting day, resulting in a "sell the news" event when the rates are cut, making it going down for a few days
Isnt it usually in the short term cutting is bad because it shows weakness in the economy. The cutting and QE usually leads to risk on markets coming back in the longer term.
tell me how you can cut and initiate QE when you have inflation above 2%.
They won't right now but if the economy shows severe weakness(which it isnt) they would consider doing some amount of cutting and QE right?
Oh yeah they will. They love market manipulation.
rate cuts yeh, QE it depends where inflation is doesnt it and how stupid the fed are, if inflation is at target QE is fine if its not too much. if its not at 2% then they either dont do QE or they do and cause inflation again kicking the can down the road to go through all this again
This year is election year and there will be many lobbysts who want the fed to cut rates just so biden can brag about the narrative and make life easier for people. And before anybody tells me that the fed is not relevant to the election, be honest with yourself. Politicians always know each other
2000 election year, 2008 election year, 2020 election year
What are you even going on about? Cutting rates directly means companies and banks can borrow money, this enables liquidity and they hire and build more projects and people can buy property, of course its good for the markets lmao.
except they never cut rates according to their plans they cut them because something is seriously wrong in effort to rescue markets
Jpiw just told you he will. Cope.
he said he will start QE?
This, cutting is not bullish. Pausing however is very much bullish
Cutting the rates would signal that the economy is going to run hotter as there will be more money floating around and growth. The rates getting cut won’t be because the economy is bad but rather because inflation is under control. I’m much more likely to borrow money if the rates are lower, and so is everyone else. That means a rate decrease is a strong signal that money will be flowing through the economy.
nope dream on
I feel like "nuh uh" isn't an appropriate response here if you're trying to make a point. Comparing 30 year fixed rate interest rates vs the DJI since 1970 side by side would imply that usually, lowering of interest rates coincides with gains in the market (not a perfect correlation but a reasonable one). I don't see nearly as much of a trend the other way. Do you have some data or research to share along your point?
yeh i do have data just go look at a chart
Let’s see: *checks notes* Aha! 2020 rate cuts resulted in the stock markets increasing by 100% and btc by 20x
He could have just looked at crypto over the last 24 hours since the announcement.
This, was gonna say that but I thought maybe I was wrong 😅
Or 2009 through 2013. Or 1981 through 1987. In fact, looking at an interest rate [chart](https://fred.stlouisfed.org/series/MORTGAGE30US) it's pretty easy to conclude that falling interest rates are good for markets and the general economy. That's probably why Wall Street is obsessed with the idea. Of course the above comment specifies "by choice" which lets him easily explain without evidence that all those cases were not "by choice," even though all of them were decisions by the Fed.
hmmm lets see they didnt raise rates due to inflation they tried to come off 0%, never been done in history before, and they caused massive inflation. is was QE that pumped the markets not rate cuts, explain how they do QE with inflation about 2% target
When rates go up, stocks (and alternatives) go down. 1. Cost of opportunity is bigger, and cash flow is discounted by a higher rate, therefor stocks are worth less 2. You could invest risk free at 5.5%, or put it in a stock and pray. A lot of money flows out of stocks and into T-bills when rates are up because of this - risk management -.
rates are above 5% and stocks went nuts
And they should go even more nuts if rates go down. Nobody’s saying high rates limit the stock markets. We’re saying that a change in rates has a direct and immediate effect on stock price. What happens 2 months after the rate movement is already a different issue.
nopeeeeeeee review history
Man, Im an economist. I spent 4 years studying financial and economic history. When Powell announces a rate hike, cut or otherwise, the stocks react in a very particular manner.
There is still trillions of dollars in money markets so on the sidelines because of the juicy 5% rates. Once rates are cut, i reckon they will start moving to stocks and this will trickle to crypto. But, i also reckon that there will be some substantial dip once JP announces cuts as this is what has happened historically as you say. I hope it is just some short term stuff like COVID was
good luck with that, imo your not wrong that money will go somewhere but after a big drop in risk on assets
Thought we were in /wsb til I saw this comment. Should be first comment.
Covid rate cut went well for the market
what when they printed an insane amount of money and caused inflation
lol 🤣, how do you think rate cut happens? You think someone point some fingers at bankers and tell them to lower the rate ? All rate cuts happens indirectly through buy and selling of bonds between reserve bank and commercial banks
LMAO, the fed lowers the base rate that banks use to borrow money from the fed you fking moron
What did you think I was saying?
Exactly.
Unemployment low, inflation ticks up, and the economy is doing decent. This is terrible policy by the Fed but perhaps they are just doing it to decrease debt service costs for the govt. Will be good for assets in the short term but is terrible policy.
its obvious they want to keep all the rats on the shit either to not create panic or to literally make sure they rek everyone when it goes tits up
Ur right. But I think the bull run could still last its course. This is bc a lot times recessions don't occur until late in the interest rate cuts
this bull run will get cut short, and it wont go anywhere near these moonboy targets. around 100k is the max i can, i saw around because we could go past it to suck everyone in. the yield curve has been inverted for 21 months, the longest time in history was 22 months. can we go for longer? sure but i would be taking each month as it comes and expecting an uninversion any day
I hope so! We need a higher inflation!
why tf do we need higher inflation
So my stocks rise higher! Makes it easier to increase profits
you realise a lot of people are living horrible lives because of inflation right?
Corelation doesn't have to mean causation. This time rates get cut because the highest for 3 decades inflation is in hand, not because the economy needs help. So more cheap money in the market is bullish.
yeh we will see about that one
Actually, cutting rates to nearly zero was a stupid idea. Giving away home loans meant people at the beginning of the world lockdowns spent their savings on property, which drove the demand, thus values right up. Then landlords got in on the milking it with some nations like Australia offering a Moratorium on rental payments should a lessee be unable to make said payments. (This meant that for a certain period of time, no penalties could be introduced to the lessor if rent wasn't paid.) Those who could continue to pay their rent normally were reminded to do so, because they would be paying the arrears in the end. I got smart with this and kept paying mine, so there was never a problem. Sadly, some could not, and those few who could have, did not, and that drove mortgages up on already mortgaged homes by landlords, since they needed to keep payments going. Up goes the money demand, and interest rates did not reflect this. Fast forward to now and you've got corporate greed (which started on the shortages - thanks China and the TP supply shortage for a minute) capitalising on everything because the "rents were going "up" so "cost of living had to go up". This knock on effect has sucked the economy dry for some (myself included), and it really was all to do with interest rates going the wrong direction during a time of high lending demand and low building supply due to restrictions. The smart thing to so when inflation strikes is to lift interest rates so less money is available to spend, thus stifling demand, and keeping prices hikes on hold. The RBA rate here is currently 4.35% and I believe it should be at least 2% higher right now, and should never have been allowed to drop to around 0.1% during the height of the pandemic. *I am not an economist, but I smart enough to see how this has happened in my local economy.*
On top of that I’m sure a lot of mortgage lenders also still made out like bandits just by offering forbearance at the time. As far as I noticed they all seemed to still be charging interest on deferred loans during those periods(no surprise there)
Yeah they did warn people, at least they did here as the law requires. But some don't read the contracts. 😂
Truth haha. A lot of people read the header “mortgage forbearance” and skipped right down to the signature line whether they needed it or not
That they did.
[удалено]
Me whenever I pay for anything:
Yes.
In Europe it was even worse The rates were going negative and the plan was to actually keep lowering them further They even had a solution for the bank runs cause why would someone keep their money in the bank with negative interest rates And the solution (iirc it was proposed by IMF) was that the cash would devalue proportionally with negative interest rates on deposits Say the interest rate on deposit is negative 1%. And the price of milk is 1€ In the current year the milk would cost 1€ for both electronic and cash transactions. But after one year, the milk payed with electronic transfer would still be €1. But the same milk payed with cash would cost 1.01€ And if you tried to convert cash back to digital euro you would get €0.99 for your 1€ of cash This way you couldn't escape negative interest rate even if you withdrew your money from the bank How crazy is that
It is nuts. As I said I think keeping the interest rate at around 6-7% at the IMF/RBA level is healthy. It's higher than CPI, so that will discourage not-smart lenders from buying. The sad side is if you have one or two rentals and use the rent as a subsidy to your payments, you can do rather well.
Yes it was. But its to late now, they already screw the system. So they need to push down the rates.
I disagree. Drop food prices and lift wages.
It’s not easy to just “drop food prices”
It's easy to raise them far beyond CPI and realistic "to-shelf" costs and report record profits in a time of high inflation. They can fucking drop them. Our nation's duopoly is under fire from the Government about this very thing right now, that prices have been hikes *far beyond* anything reasonably above CPI over the last couple of years.
Yeah if it works. Then its good. The problem is they have trapped people in this loan rollercoaster, becasue people couldnt afford. When my parents where Young they could buy a apartment for 1 yearly wages, today its 3 yearly todays wages.
That's actually cheap. In the 80s the economy was similar to what yours is now, now a house is ten to fifteen yearly wages without interest, which would add another ten. The biggest issue is saving for a deposit, which in this crisis means that personally I can get one organised in around, thirteen years.
This was already in the cards. It’s an election year.
Pausing rate cuts is definitely bullish. However, cutting rates has been soon followed by a crash / recession 2/3 of the time. This is by design. This is not an opinion, but a fact. You can go and confirm yourself. The other 1/3 is the so called soft landing they speak of. Those are your odds. Do with it as you will.
Rates were cut in response to (impending) recession, not the other way around. There is a world in which rates are cut not in response to recession, but in response to the fact the US government can't afford to pay the interest, despite the economy doing just fine. This is not really related to those past data points, but is what I expect to be the most likely case.
See this is what most people dont understand, its all about the money.
CBDC [pros](/r/CryptoCurrency/comments/1bk4t5u/the_fed_not_cutting_rates_now_is_more_bullish/kvvppci/) & [cons](/r/CryptoCurrency/comments/1bk4t5u/the_fed_not_cutting_rates_now_is_more_bullish/kvvppx3/) with related info are in the collapsed comments below.
* Relevant Cointest topics: [Ripple](https://www.reddit.com/r/CointestOfficial/wiki/cointest_archive#wiki_ripple), [Stellar](https://www.reddit.com/r/CointestOfficial/wiki/cointest_archive#wiki_stellar), [Tether](https://www.reddit.com/r/CointestOfficial/wiki/cointest_archive#wiki_tether), [Government Regulation](https://www.reddit.com/r/CointestOfficial/wiki/cointest_archive#wiki_government_regulation). * Relevant subreddits: r/FederalReserve, r/Ripple, r/Stellar. * Sort comments as controversial first by [clicking here](/r/CryptoCurrency/comments/1bk4t5u/the_fed_not_cutting_rates_now_is_more_bullish/?sort=controversial). Doesn't work on mobile.
#CBDC Pro-Arguments Below is a CBDC pro-argument written by cryotosensei. > The typical retail investor may assume that Central Bank Digital Currencies (CBDCs) are a high-brow concept that is still in the conceptualisation stage and will only take effect in the future. However, according to Atlantic Council, ten countries have fully launched CBDCs, the most prominent of which has to be the digital yuan, also known as e-CNY, that was launched in China and continues to make superb inroads into consumers’ payment habits. The IMF also noted in a speech in February 2022 that about 100 countries are currently exploring CBDCs in one way or another. Hence, CBDCs may well become as ubiquitous as fiat currency. Just what are the advantages of CBDCs? > > 1. CBDCs are backed by the central bank, so they are recognized as legal tender and can be used as a payment app. Besides the peace of mind afforded to citizens, CBDCs come in handy during periods of economic downturns because central banks can deploy them quickly to give out stimulus checks to the lowest-income groups who need government handouts the most. > 2. CBDCs are distributed through commercial banks. This alleviates the problem of too much disruption to the financial system. > 3. CBDCs help unbanked populations get access to money and be included in their nation’s financial systems. Take for instance Jamaica, in which 17% of the population are unbanked. Since mobile phone use in Jamaica is pervasive, the authorities’ launch of a CBDC called Jam-Dex will help unbanked Jamaicans get paid electronically since they can access it via a banking app on their phones. The same can be said of the Bahamas, which launched the Sand Dollar in October 2020 to reach out to its unbanked population. > 4. CBDCs provide cost savings. One reason why Jamaica piloted its Jam-Dex program in the first place was the substantial cost (more than $7 million) incurred in replacing dollar notes of all kinds. Removing all transaction costs problems associated with cash will thus save government agencies and business enterprises money. > 5. CBDCs bolster resilience to the domestic payments market. In China, AliPay and TenPay/WeChat Pay dominate the mobile payments market. Should the private enterprises governing these mobile payments suffer a huge hit to their vitality, the repercussions on the mobile payments system could be far-reaching (and aggravated if there are no safety nets in place). The incorporation of the e-CNY was aimed to act as a backup to AliPay and TenPay/WeChat Pay. > 6. CBDCs facilitate cross-border remittances at a low cost. Cambodia launched its CBDC, Bakong, in October 2020. Since many Cambodians work overseas in Malaysia, the National Bank of Cambodia collaborated with Malaysian commercial bank, Malayan Banking so that Cambodian migrant workers in Malaysia could send money to their loved ones without hassle. > 7. CBDCs act as a safeguard against the illicit use of money. The Bahamas did not have a robust Anti-Money Laundering/Combating Financing of Terrorism framework and was flagged out to undergo extra monitoring under the Financial Action Task Force list in 2018. Following its introduction of the Sand Dollar, the Bahamas was taken off the list in December 2020. > 8. CBDCs is a safer option compared to stablecoins, which are largely unregulated and pose risks to the financial system. The recent collapse of the algorithmic stablecoin, UST underscores this point. > 9. CBDCs ensure monetary sovereignty. Particularly, the United States would be concerned if global citizens start adopting a stablecoin or a foreign CBDC en masse, thus leading to the possibility that the U.S. dollar might not remain the world’s favored payment mechanism. This explains why President Joe Biden signed an executive order in March 2022 that focused on the exploration of a U.S. CBDC. ***** Would you like to learn more? Check out the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_CBDC) to find submissions for other topics.
#CBDC Con-Arguments Below is a CBDC con-argument written by Nostalg33k. > # CBDCs are the worst possible outcome for our societies. > > > > CBDCs or Central Bank Digital Currencies are a very bad idea. While government planning can be a good thing, the problem with CBDCs are multiple and none should be underestimated: > > > > # 1) Tracking money, free will and consumption. > > > > In a world with CBDCs, the data collection would allow government to use ultra specific ads targeted to the individual in order to push them towards certain behaviors. The tracking of money would allow the government to have an eye in your personal finances. > > # 2) A good government ? > > A good government is required for CBDCs to work, the problem is that a good government is one of the hardest thing to achieve and the requirements may vary. An example for our platform is: would you trust the Chinese government to manage a CBDC or the Talibans ? I don't think so. > > # 3) What about the forgotten people ? > > With the expansion of NIMBY minded-people, we think less and less of homeless people. The problem with CBDCs is that they are pushing us towards a cashless society. People living through scraps of coins from pan handling would die off. A society which hasn't resolved the Homeless problem should not be introducing CBDCs and other steps towards a cash-less society. > > # Conclusion: > > CBDCs may be one of the most powerful financial tool ever created BUT they are also a doubled edged sword. One should be very careful when trying to introduce it and their introduction without consent from the population could lead to uprising and other troubles. ***** Would you like to learn more? Check out the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_CBDC) to find submissions for other topics.
Guys, if I'm BULLISH AF longer than 4 hours, do I need to consult a doctor?
I love how Bitcoin going from down 80% to new ATH isn’t considered a bull run here
You have to ask yourself...in what situation would they cut rates. It's when things are "going bad", so it's not the best time when rates are being cut
>This time is different Said everyone at the top of every market.
The year after btc halving is usually better than the halving year, correct. But history doesn't always repeat exactly but rhymes. 2023, the year before the halving was actually very good. So maybe we are a year advanced this time? Whenever the fed turns hawkish all markets are going to get smashed. Doggy coins and buttcoins especially What is the hype behind this bull run? Ai in stock markets but in crypto most of the ai coins are hype. What else do we have now that we didn't in 2021? Ordinals ? Layer 2, depin? . Besides degens betting on the next meme coin I don't see it yet
Tokenization of assets…like Blackrocks new fund
The only difference is see is the the ripple case has provided a smidgen of clarity. But under this bull run being based on UTILITY. Once clear laws are passed, it will be an explosion if using things for their intended purposes. And then the projects that DO SOMETHING will get their time to shine.
*AI coin joins the chat*
History shows 6-12 months after halving
It's the wait and see game, history can repeat itself, or we have a new kind of run since everyone from everywhere is buying in now.
They will send US rates to ATH and nuke all other coins.
Dude bullrun already started
bull run by definition is 20% off the lows. by definition.
Bunch of jibberish
I hope it holds off for atleast 6 months, i have positions im still building.
No rate cut was already priced in
"this time is different"... never heard that before. but this time... this time, you just might be right
Its weird how risk-on investors like crypto buyers are excited for rate cuts. Rate cuts are a signal that the economy is in distress and needs governme t assistance to correct. That's /bad/ news for risk assets. Sign me up for refinancing my mortgage at lower rates, but I'm not excited for our government to publicly admit the economy is in need of its help.
[https://fred.stlouisfed.org/series/FEDFUNDS](https://fred.stlouisfed.org/series/FEDFUNDS) When you look at this chart (slide the left slider to around year 2000) it makes me think recession is inevitable by summer. Maybe that's why the fedwatch tool won't give in on rate cuts, they think things will break by then?
Agreed
Nope, wrong. The federal reserve cuts interest rates *only when* something breaks i.e. unemployment begins to increase even further. They are keeping rates higher for longer to continue to drain liquidity from the economy and to tame inflation. They will cut rates when they feel like they have achieved their target inflation rate of 2% and liquidity has been sufficiently drained. * March 2020 - Fed cuts rates from 175 basis points to 0 when C19 emergency declared. S&P tumbled 30%. * Sept 2008 - Dec 2008 - Fed cuts rates from 200 basis points to 0 during GFC. S&P fell 43%. Tell me again how cutting rates is a good thing? Don't spread misinformation if you don't have anything to back it up. OP is a moron /u/derika22.
If we're bullish on expected rate cuts, it sounds like the actual rate cut might be a sell-the-news event.
It is. Especially because rate cuts mean that the economy is fucked and heading towards recession. That's when the markets break usually.
They may also cut rates simply because the US government can't afford the interest, despite the economy doing well.
he wont cut rates, if he was he would have said so, "we are expecting" and "we will see how it goes" bullshit he knows he cant cut rates this year because he has been fucking lying all along about the inflation rate, bet its much higher he doesnt give a fuck anyways all he has to do is wait out the elections
What are you talking about. The Fed’s base case is for 3 rate cuts this year. That’s why the market rallied yesterday. He doesn’t make up the inflation rates, not sure how he can be lying about it. Maybe you don’t trust the data coming Bureau of labour statistics about inflation, but that’s up to you.
If Trump wins, he wont stay FED chair...Jerome will make anything possible to please the the market and increase his chances to stay. Trump said in some interview that if elected, he will make sure someone else will be chair of the FED
Don’t worry. Trump will not win. People have brains.
Are you new here? Look around a bit and then tell me you think the average person actually USES the brain they have. I know I don’t half the time. Especially once I enter my crypto mindset.
Good Joke
Sorry to tell you but that's a bit delusional.
I remember similar sentiment about 8 years ago..
And he’s done nothing but lose votes since then. Go check. Also killed a million people by ignoring Covid. Mostly R’s. 🤷♂️
I agree with all of that, for sure. The lower the voter turnout, the better chance trump has though. If everyone just assumes he can’t win and doesn’t vote, then he absolutely could win.
If every woman forgets about their bodies. Then yes, maybe he has a shot. But you’re talking about a 10% chance. This guy is hated by 70% of the country.
The bull run is this year because the halving timing. Its usually 6 months after the halving we start hitting new all time highs.
Yep nothing to do with real life events. It's only the halving.
Yep EFT had nothing to do with it. /s
We havent even started the halving bull run. Thats why end of this year we peak.
Yes, supply shock due to the halving. Thats why it happens every time. End of this year will be near peak like always.
Exactly buy BOME
No, buy FART