Quote:
Originally Posted by unfrgvn
I'm a little younger than Powell, but I would consider rates in the 5-8% range "normal". At least that is what they were when I grew up. Maybe he's anchored in the past.
I certainly wouldn't mind rates getting to 5%. I think they need to get there so the Fed can have tools to fight the next crisis with.
I think you are right. 5-8 is normal and 5 is a mental default for me. Like when pricing a mortgage or something.
My issue with it is the context. If we were all making love not "war" globally I'd be all for raising.
But if the market has become addicted to the "crack" of near zero rates (for what, like a decade...), and it has become fragile given US/China relations, and is legitimately concerned about escalation...does it really make sense to further rock the boat by raising (and raising with tone they did?).
Imagine you have just sailed through a storm (2008) but returned to smooth waters (new all time highs). But now the water is getting kind of choppy (new President w/ big ideas and moves to be made...China / US confrontation...).
What do you do? Batten down the hatches and stay seated in the middle of the boat? Or do you go to one side of the boat...and potentially start jumping up and down?
...what happens to the boat?
...what happens to the world if you capsize the boat?