Interest Rates Possibly Bumped Up Again Soon

^Look at the bright side, you said you wanted to buy a car, keep your eyes open for incentives, and I noticed Chevrolet is offering either 0% or near 0% financing on Silverados and Tahoes again, expect other auto manufacturers to follow looking to divest themselves of expensive inventory as it sits longer and longer waiting for buyers.

Rates be damned, my house keeps going up in value (God bless real estate inside 128 in Boston) and my mortgage looks better and better--it's a full percent less than I even get from my savings account. Lots of these tech companies overhired in the first place. Amazon, Meta, Google are letting a small fraction go. When times were flush, they could afford to spend on vanity projects and bizarre benefits and unproductive hires. Now they're subject to the same financial constraints as everyone else. Almost no companies stay at the top for generations--the FAANGs will be the GMs and GEs of the next generation. Interest rates work by starving corporations of liquidity, and with that causing them to lay off, and unemployed people spend less. In all likelihood, this will hit unemployment sooner rather than later. And I'm sure SJG is in Santa Clara County Jail after trying to induct a stray poodle or 4-year-old boy into His Organization.

That's exactly what the Fed (not government) wants you to do. It's the consequence of inflation. 15% in two years, to be exact (Jan '21 to March '23). Hot economy is good for people (as their wages should be rising) and businesses (as they are getting more of consumers money), but when inflation takes hold like it has, it has a negative effect, and raising rates is the primary tool the Fed has to combat inflation. Look for one more small 25bps hike tomorrow, and that's probably it. They will hold steady for the rest of the year.

I’m taking this year as a pass year and just save up for ‘24 and see if things change

I’ll bet rates will start dropping a tad in early ‘24 to support the Biden\Dem run (assuming he stays in). If rates stay high voters will blame the Dems. Plus it will goose vehicle rates and mortgages down.

Used car rates: 4 years ago I thought of trading in my 2014 Outback. The sales guy offered $7,200 and said if I don’t take deal it’ll only go lower - a real “used car” type sales guy; I had purchased 3 other Outbacks over the years. In September’21 I sold it for $14k and took out a 1.5% loan for the ‘22 Outback I have today. I got lucky. I’m a tad pissed off at Subaru for the crappy electronics and lack of software updates that have affect all owners and I won’t buy another.

What about using inflation as an excuse to raise the price for everything?? There's a term for that: "price gouging".

I expect in about a year we'll see increasing used inventory as people who bought during covid fail to make payments. I'm holding out until next year

Admittedly the economy has me more than a little concerned. I'm no longer in the workforce so no longer able to contributing to my IRA. I've had the jitters for last 3 months on what to do with some of those funds. Decided last week to play it safe for now, CD fixed rates are up to 5% and above. I purchased $225K in four CD's maturing in 2 & 3 years. I realized the gain won't be great but can't lose my initial investment if I chose the wrong mutual fund Not sure that's the correct move only time will tell at least I can rest somewhat easier. Any thoughts?

Inflation harms savers but helps borrowers, who can pay back their loans with money that is worth less. The biggest borrower of all is the federal government, now borrowing a trillion dollars a year to make up the difference between spending and tax revenues. For this reason, it is likely in the long run the government will run an inflationary policy.

We are doomed, no matter what we do, because everyone is doomed.

All this attention is being paid to interest rates when the real cause of our economic hell is obscene spending by our government. Until that is under control, monetary policy will accomplish nothing.