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Raising Rates Is Inflationary.

betaguy
  |     |   181 posts since 2022

I'm thinking, raising rates is inflationary.

The higher rates go, the more money is put in circulation via interest payments on CDs and the like.

What's the difference between that and stimulus checks for covid?

It's just more free money for nothing. (I'm not complaining)

What say you.

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4


sharon907
  |     |   36 posts since 2022
are you joking?  by definition, savers don't spend every dime.  this is why the central banks can prop up stock prices, without causing inflation.  give a billionaire another billion, they likely won't spend (much of) it.  their goal, is to buy income producing assets.

making it more expensive to spend money, especially borrowed money, motivates spenders, to spend less.

good luck.

it is hard to imagine any worst performing central banks than first-world central banks, but some try.

https://www.cnbc.com/2022/11/03/turkeys-inflation-tops-85percent-as-erdogan-continues-to-rule-out-in...

Inflation in Turkey rose for the 17th consecutive month in October, hitting 85.5% year-on-year as food and energy prices continued to climb, according to official figures.

Food prices were 99% higher than the same period last year, housing rose by 85% and transport was up 117%, the Turkish Statistical Institute reported Thursday.

The domestic producer price index shows a 157.69% increase annually and was up 7.83% on a monthly basis. The monthly rise in consumer prices was 3.54%.

The dramatic rise in living costs for the country of 85 million has continued unabated for nearly two years, in tandem with significant devaluation of Turkey’s currency, the lira

Controversially, Turkish President Recep Tayyip Erdogan refuses to raise interest rates, insisting that it would harm the economy. Economists and critics say his policies have continued to hurt the lira and push inflation up, fomenting a currency crisis.
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w00d00w
  |     |   360 posts since 2012
M1 and M2 gauges of money supply have been flat to slightly lower in recent months despite rising interest rates. it seems to me that a big part of the reason is that personal savings rates have plummeted since the pandemic shutdown. as a percent of disposable income, it's at a low not seen since 2005.

https://fred.stlouisfed.org/series/PSAVERT
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