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mahatmakanejeeves

(61,347 posts)
Sun Oct 30, 2022, 07:46 AM Oct 2022

Cash-Rich Consumers Could Mean Higher Interest Rates for Longer

Consumers and businesses buoyed by pandemic-fueled savings are proving less sensitive to tighter credit, which means more work for the Fed

wsj.com
Cash-Rich Consumers Could Mean Higher Interest Rates for Longer
Consumers and businesses buoyed by pandemic-fueled savings are proving less sensitive to tighter credit, which means more work for the



ECONOMY | THE OUTLOOK

Cash-Rich Consumers Could Mean Higher Interest Rates for Longer

Buoyed by pandemic-fueled savings, consumers and businesses are proving less sensitive to tighter credit—complicating the Fed’s job

By Nick Timiraos
https://twitter.com/NickTimiraos
Nick.Timiraos@wsj.com
Oct. 30, 2022 5:30 am ET

Washington’s response to the pandemic left household and business finances in unusually strong shape, with higher savings buffers and lower interest expenses. It could also make the Federal Reserve’s job of taming high inflation more difficult.

The U.S. central bank is trying to slow down economic growth to prevent inflation from becoming entrenched. To that end, it has increased rates aggressively this year and is likely to raise them another 0.75 percentage point at a two-day policy meeting that concludes Wednesday. That would bring the benchmark federal-funds rate to a range of 3.75% to 4%.

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Cash-Rich Consumers Could Mean Higher Interest Rates for Longer (Original Post) mahatmakanejeeves Oct 2022 OP
Aw, bullshit. What will make inflation last longer are corporations Warpy Oct 2022 #1
Households still have around $1.7 trillion in excess savings they accumulated through mid-2021 ... mahatmakanejeeves Oct 2022 #2

Warpy

(113,131 posts)
1. Aw, bullshit. What will make inflation last longer are corporations
Sun Oct 30, 2022, 11:46 AM
Oct 2022

that have gotten used to huge corporate profits from higher prices.

That garbage of "too many dollars chasing too few goods" works most efficiently in bubble markets. It also worked in Germany and Austria after WWI when their governments printed money thinking it would fix the problem of postwar inflation. We'ver just been through a massive money printing operation, ourselves, thanks to TFG's only idea being to throw money at Covid, much of which was stolen and put into the stock market. Well, now it's starting to work its magic on the larger economy, and it's one reason for the inflation we're seeing now.

Wages always lag behind inflation, so good luck to any dumbass who tries to prove the cart drags the horse.

Then again, this is the WSJ. One expects nothing less from a Murdoch rag than blaming working people for the collapse of civilization.

mahatmakanejeeves

(61,347 posts)
2. Households still have around $1.7 trillion in excess savings they accumulated through mid-2021 ...
Sun Oct 30, 2022, 11:49 AM
Oct 2022
Households still have around $1.7 trillion in excess savings they accumulated through mid-2021, down from a high of $2.3 trillion, according to estimates by Fed economists.

Around $350 billion in excess savings as of June were held by the lower half of the income distribution


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