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The story
On September 16, the U.S. Federal Reserve raised its policy rate by 0.25 percentage points at the FOMC meeting, bringing it to a range of 3.75–4.00%. This is the first rate hike in three years and two months, since July 2023, marking a shift away from its previous wait-and-see stance. The move comes against a backdrop of rising energy prices driven by tension in the Middle East, aiming to prevent inflation from becoming further entrenched. On 5ch threads, opinions were divided over whether rate hikes can actually work against supply-shock-driven inflation, whether the Bank of Japan should follow suit with its own hike, and the apparent gap with President Trump’s earlier demands for rate cuts.
[Washington, Jiji Press] The U.S. Federal Reserve, at its Federal Open Market Committee (FOMC) meeting on the 16th, decided to raise its policy rate by 0.25 percentage points to a range of 3.75–4.00%. This is the first rate hike in three years and two months, since July 2023. Inflation has been accelerating due to higher energy prices stemming from the U.S.-Iran conflict, and to prevent prices from staying elevated for even longer, the Fed shifted away from its previous wait-and-see approach.
Continued: Thu 9/17, 3:30
Source: news.yahoo.co.jp / Original article here
What people said
if we don't raise it a full 1%, the yen's just gonna weaken right back again.
The yen-carry-trade unwind should hit any time now — expect the yen to surge like a dam bursting open.
Gradual, step-by-step hikes are fine.
Nickel-and-diming the rate hikes just gets seen through by the market,
and in the end you still can't stop inflation and get cornered anyway.
It only drags out the pain and makes the damage worse — seriously dumb.
Whether Trump picked him or not, turns out he's someone who actually does his job as Fed chair properly.
If Japan raises rates, prices keep climbing, corporate bankruptcies increase, the yen keeps weakening, and the recession just gets worse.
They're not dumb enough to go along with an unreasonable Trump.
They're already half-dead from interest payments, and hiking rates to push the dollar higher will finally finish them off.
Do they actually want to fight high prices,
or did they just not want to go along with Trump?
One of the main causes of Japan's high prices is the weak yen, so a BOJ rate hike would actually work to curb inflation.
If the US hikes rates, that just pushes the whole thing (curbing inflation) further out of reach.
That's why the BOJ needs a surprise hike of around +0.5%, or the weak yen plus expensive oil will kill us.
160 yen (to the dollar) is coming fast.
Prices keep climbing.
Falling stocks make companies stop raising wages.
That's deflation right there.
No — that's stagflation.
Hiking rates against supply-shock-driven inflation doesn't actually curb prices.
If anything, it just triggers higher long-term interest rates and even more inflation.
If he doesn't, we're right back to 160 yen.
That's the root of all evil behind the economic problems every country in the world is dealing with right now.
Throw in the rumors about Xi Jinping's health, and apparently they're ramping up readiness for some kind of civil war or something.
Feels like the big powers have already settled something behind closed doors lol
The ECB already hiked last week lol
He was even threatening to cut off trade with countries running a trade surplus with the US if they didn't cut rates.
Guess this shows the Fed is actually keeping its independence —
unlike the BOJ, which is a slave to the government.
The Fed: "Well, a war broke out, so there's nothing we can do about it."
Wasn't the script supposed to be the US cutting rates under Trump's pressure while the crazy BOJ hikes??
A double rate hike means higher debt-servicing costs and a slowing economy — right there.
That's just how the economy works — booms and busts on repeat.
The reason Japan's economic policy failed is that it never managed to make trickle-down actually happen.
Background and Key Points of This Story
Behind this move lies the standoff between the Trump administration, which has been pushing for rate cuts, and the Fed’s independence. A notable feature of this hike is that it isn’t a response to an overheating economy, but rather to supply-shock-driven inflation caused by higher energy prices amid tension in the Middle East. On the thread, opinions were split over whether a rate hike can even work against inflation driven by supply-side factors, with some pushing back that it would only push long-term interest rates higher. The ECB had already finished its own hike the week before, and whether the Bank of Japan will follow with a hike of its own is set to be the next focal point. Since rate hikes also ripple into mortgage rates and costs for import-reliant companies, the impact on households and businesses at home is worth watching closely.
*This article is excerpted and summarized from the 5ch (News Speed+) thread “[Breaking] U.S. Fed hikes rates for first time in 3 years, shifting stance to head off prolonged inflation.”
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