Nobel winner Stiglitz says Fed raised rates ‘too far, too fast’, should cut big \ stacker news ~econ

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Nobel winner Stiglitz says Fed raised rates ‘too far, too fast’, should cut big www.cnbc.com/2024/09/06/nobel-laureate-joseph-stiglitz-wants-the-fed-to-deliver-a-big-rate-cut.html

481 sats \ 2 comments \ @siggy47 6 Sep econ

This is another Nobel Prize winning economist. He argues that a big rate cut can actually ease inflation since housing is a large component of inflation. That's true, but the reason for this is the artificially inflated markets, including real estate, that have been pumped up beyond all rationality by years of easy money.

More of the same isn't the answer.

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85 sats \ 0 replies \ @TomK 6 Sep

They should have gone even higher with the interest rates to teach all the commies, especially Europe, a lesson in fear. We must finally get away from this ESG nonsense financed by zero interest rates.

43 sats \ 0 replies \ @Bell_curve 6 Sep

Let’s see what CPI or core inflation is in August.

Another Nobel prize winner who is a partisan hack.

Edit: Stiglitz said it was “really important” for the Fed to have normalized interest rates, adding that it was a mistake for the U.S. central bank to have held the benchmark borrowing rate near zero for such a long period since 2008.

Rates were too low for a decade since 2008, more than a decade since rates were super low in 2021. Powell waited too long to raise rates in 2022. A gradual proactive approach would have been better.

Another problem is keeping bank reserve requirements at zero percent. Another way to stabilize the money supply is increasing capital reserves. Banks have a smaller fraction to lend.