Federal Reserve vows to raise interest rates later this year

submitted by magnora7 from msbusiness.com

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[–]Goober_notorious2 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (6 children)

“I feel like the rate hikes are a good thing for the economy and markets. The longer-term rates have not risen as much as the shorter-term rates, which means CD and short-term investors really experienced a raise in the income they receive from savings.”

To me this sounds like it's benefiting the "new middle class" of 6 figure incomes... and people with savings and investors, that's privileged people too!

My first question was 'how's this gonna fuck us' lol, and soo, is it gonna help everyone default /default worse/get screwed on student loans primarily, and other debt, and then let the Fed need bailout for those loans that don't come back that they're counting on?? Kinda?

Aaand lastly, there it is: ...The primary cost to consumers is that borrowing money is more expensive and will continue to become more expensive if the Fed continues to increase rates.”

And yet, to make any money, you basically HAVE to get loans... thanks, Fed, idek anymore.

[–]magnora7[S] 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (5 children)

It's like in the 2008 housing crisis. Everyone had too easy of loans, too many people were in over 100% mortgage debt, etc. Then they weren't repayable so the housing crisis happened as a lot of people defaulted.

So I guess they're seeing something similar here, too many easy loans that probably won't be repaid.

The downside is raising rates and tightening the money supply could crash the stock market, and make a few big unstable companies go out of business.

I think we're about to see an economic crash like 2008, and it's going to be blamed solely on Trump by the media. But hopefully I'm wrong. But right now we're in the longest upward stock market movement in US history. It can only go so long. This thing has natural cycles, and the fed tries to surf those waves.

[–]Goober_notorious2 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (4 children)

Yesss so I did basically understand! I'm getting a hang of this...lol. Thank you! If you want to answer, what's your advice about how to weather this next economic storm? In 2008, I was in college, and, now, in 2018, I'm a prime example... swimming in unpayable student debt including my masters degree, and a slave to my (although loved and appreciated by me) social work career :)

Edit: fixed end that was chopped off

[–]magnora7[S] 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (3 children)

No problem. Personally, I would get out of the stock market, including any 401k. I would just have everything in cash, maybe put 1/3 in cryptocurrencies if you know how to do that. But I'd probably just focus on repaying the debt, unless you have a really good interest rate.

[–]Goober_notorious2 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (2 children)

Thanks again! Yeah I never got into stocks or anything and don't plan to... and I'm not yet savvy enough to get into cryptocurrency...nor do I currently have any "play around" money, lol. Is there an existing EILI5 for cryptocurrencies? Like what makes them stronger right now?

[–]magnora7[S] 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (1 child)

Well they're actually at a low right now, because the stock market is at a high. When the stockmarket goes down a lot, people will move in to crytpo for better returns, and the price will go up.

[–]Goober_notorious2 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (0 children)

Mkay. Thanks!!