Rhode Island cuts pensions, gets backing from federal court

[GMDino]

(02-21-2018, 12:32 AM)JustWinBaby Wrote: It's generally called the global deflation dividend.  In other words, had we not been printing so much money and with such low interest rates, we actually would have seen deflation.  So that was soaked up or offset with what actually amounts to a hidden tax.

The Fed has a lot of influence over the short term interest rate.  They want to put bullets back in the gun for the next recession, but have wanted to normalize rates for a long time.  It was just the economy wasn't all that strong to do a lot of raising.  Markets, however, tend to determine the longer-run interest rate outlook....with the 10-yr being a proxy (generally what mortgage rates get set off of), and that just isn't moving much.  So this is called a flattening of the yield curve, which tends to precede a recession.

Also, slack in the labor market (unemployment, underemployment, and artificially lower participation) is a big part of why wages weren't moving.   That apparently is starting tighten up, but I have my doubts.  I think companies are passing on some of those tax cuts because they don't want to see a wave election for Dems end-up rolling things back.  I'm just worried if and when we finally get to a truly healthy economy it will be short lived before another severe recession hits.

Thanks for that.

From what I've been reading I'm not sure a much healthier economy is sustainable no matter who is in charge. Mainly because oversight and regulations to keep an eye on bad practices are being waylaid.  But a recession is inevitable in any case.  These things are cyclical as we all know.  It's just a matter of how far we fall and how long it takes to recover, IMHO.