Is the Fed Done Raising Rates? Student Loans & the Quietly Sinking Economy

TL;DR

Raising interest rates could lead to a bubble in various markets and negatively affect pension funds, consumer confidence, and the chances of presidential candidates in an election cycle.

Transcript

do you believe the FED is done raising rates I think at this point if they continue to raise rates they even though they want the economy to slow down they're going to cause a bubble to rip across a bunch of markets that they don't plan to so I've been asking for the last two years why haven't they announced that we were in recession somebody final... Read More

Key Insights

• 😘 The Federal Reserve may not be able to afford to raise interest rates due to various factors, such as low consumer confidence and negative pension funds.
• ☠️ The upcoming election cycle adds pressure to keep interest rates stable, as it could impact the chances of presidential candidates.
• ☠️ Delinquency rates, unemployment, and consumer bankruptcy filings are indicators that may influence the decision to raise interest rates.
• 🤨 Negative mortgage balances in Canada, the alarming level of national debt spending, and the rise in homelessness in New York City provide additional evidence against raising interest rates.
• 🌍 The interest on the national debt exceeds the spending on national defense, raising concerns about the country's financial stability.
• 🇺🇸 Despite having a large gold reserve, the United States rarely discusses it in the context of the economy.
• 🇦🇪 Mortgages comprise a significant portion of household earnings in both Canada and the United States, emphasizing the economic strain caused by rising interest rates.

Questions & Answers

Q: Why should the Federal Reserve stop raising interest rates?

If interest rates continue to rise, it may lead to a bubble in different markets, which could have severe consequences for the economy.

Q: What is the potential risk of revealing a recession?

Exposing a recession could create public outrage since many pension funds are already negative, and this information would have to be reported.

Q: How does consumer confidence impact interest rates?

The low consumer confidence, including among the highest earners, suggests that raising interest rates could have adverse effects on the economy and diminish presidential candidates' chances of winning.

Q: What factors could prevent interest rates from increasing?

The auto workers' strike, the recent Hollywood strike, and the unstable state of cryptocurrencies indicate that raising interest rates further would be detrimental.

Summary & Key Takeaways

• Raising interest rates further could cause a bubble in multiple markets, risking negative impacts on the economy.

• Revealing a recession could lead to public revolt due to many pension funds being in a negative state.

• The high cost of mortgages and low consumer confidence are factors that suggest interest rates should not be raised.