.

[ChicagoSchooler]

.

[Possum577]

By PCE do you mean private consumption expenditure?

[NUFCrichard]

In honor of Madame Chair's commitment today to raising rates even if inflation is low, I want to ask "how low can you go?".

It might be tough to say you're going to raise rates in a deflation with a straight face.

I vote "yes".

There are different kinds of inflation and deflation.  In the UK, I think it would be a good thing for the general economy if the interest rates were raised, even if only by 0.25% or so.  People need to remember when buying houses that rates can go up, and they cannot just borrow for almost nothing to fuel another huge housing bubble.

The deflation at the moment is largely due to energy prices falling.  The worst case scenario that I see if that they will stay where they are for a while now, Brent being about $60 a barrel.  That means that in 3-4 quarters the price decreases will wash through the system and inflation will return to about 1.5%. 

The situation is similar in America.  One slight difference is that the USD is strong right now that increasing rates will make exporting damn hard.  The pound isn't quite as bad.  If they are going to constantly feed us news that everything is good in the UK and US economies, surely they have to return rates to normal, or at least start the process soon.

[Lethn]

Raising interest rates would make borrowing more difficult and that would mean a slowdown for the economy becuse less people would be borrowing crazy amounts of money to spend, they're never going to do it until there's another crash.

Deflation was huge problem in Great Depression. The reason it is perhaps not as scary now is because you have a Federal Reserve that is intervening in the market, unlike the 1930s.

Please, please use the correct terms for deflation and inflation, deflation isn't a process, it's a symptom of inflation, the more the currency supply increases the more inflation it creates deflation being the result or the symptom, I swear the reason nobody fucking understand what's going on anymore is partly because the basic definition of words has been so butchered you can hardly use it anymore.

[johnyj]

FED has proved that printing 5x more money will not cause any inflation, since they have all those money in their pocket. Now banks are sitting on that cash mountain, they will prove again that raising interest rate will not cause any deflation, since all the interest income goes into their pocket, and they will start to spend hard

However after this run, everyone will understand that the inflation and deflation has nothing to do with money supply, it is all an excuse of banks to make more money

[Possum577]

That's it, the poll's over with four total votes?!

The US Fed has stopped the QE, there's bound to be some deflation as a result but they can control rates to keep things adjusting steady rather than wild. At some point they'll have to raise rates again, there will likely be a slow down but so much time has been allowed for the US economy to adjust, I don't think we're going to see some major destruction as some people on here are prophesizing.

And if we do see some destruction, buy into it!

[Possum577]

Haha, this guy thinks so.

http://newamerica2020.com/?gclid=CPui6JjPmsQCFRSIfgodlZQAFg

I can't find any legit information on this sales pitch. Sounds like a scam but he's got a great hook, a compelling set of fears that are easy for one to adopt.

[tyrexs]

i think oil will up again in this week or next week