Ascension100 t1_iuge456 wrote on October 31, 2022 at 2:55 AM

Reply to comment by _TH3BAND1T_ in Let’s reflect on Jpows rate hikes up until now. by LessTalkMoreRock1

So rate hike to stop a recession. Rate hikes are what is causing the market to lower in the first place. The only reason its happening is to stop inflation from getting out of control in the hopes of orchestrating a stock crash to crash commodities, but commodities are increasingly getting harder to manipulate as other factors are impacting their prices more. Not to mention the suadis and opec are tired of the feds manipulation and are willing to cut oil production faster than the feds are willing to increase rates.

Rate hikes will of course cause a descent stock market correction, but allow for future growth when things settle, but the problem is that the market will want 0% again and won't tolerate "higher " rates like 2% and have a decent booming stock market.

_TH3BAND1T_ t1_iuicgpv wrote on October 31, 2022 at 3:37 PM

Well, let's be real the market will tolerate whatever it's given. But, yes close to 0% rates are optimal for fastest growth of economy. It should be remembered though that with 0% interest rates comes gross company valuations and wealth gaps. Along with it comes a more volatile market environment in general due to unnecessary risks of businesses.

Personally, I think that rates should be atleast the inflation rate. This means that 2% would be the bottom of rates. The 0% rates screwed us if you look at the economic reaction from a small virus.