The Fed is expected to raise the benchmark funds rate by three quarters of a percent today. Goldman Sachs is now predicting consecutive 75 basis point rate hikes in June and July, followed by a 50 basis point move in September and 25 basis point moves in November and December, taking the fed funds rate to a range of 3.25%-3.5% by the end of the year.
Keep in mind that the rate has been, with the exception of FY2019, at an average of less than one percent since 2008. The Fed chairman has now said that he will have to purposely cause a recession in order to get inflation under control. Think about that for a minute, and what that means. The powers that be are going to purposely shut down the nation’s economy.
Meanwhile, gas prices near me are at $4.95 a gallon. If I drive 10 miles away, I can hit Sam’s club and get $4.53 a gallon, meaning that a single fill up of my pickup’s 40 gallon gas tank pays for nearly my entire annual membership fee.
Things are about to get a whole lot worse. We are so incredibly screwed.
4 Comments
WDS · June 15, 2022 at 7:53 am
The Sam’s Club by me is now reminiscent of the Jimmy Carter days now. You have to actually wait in line to get to a pump. Naturally it’s on a busy corner making it even more of a clusterf*ck to negotiate. I’ll gladly give the few extra cents to my independent guy that also runs the IGA grocery store just for the convenience of no lines and easy access.
Big Ruckus D · June 15, 2022 at 9:59 am
I notice the spread on price between sams club and regular stations shrinking. At some point; I surmise the difference will be small enough that the lines will go away, as many people will value their time more than the meagre savings to be had.
Of courses, eventually there will be bonafide fuel shortages. And don’t overlook the likelihood of demand destruction beyond a certain price. That will reduce consumption but will probably do nothing to bring the price down.
SiG · June 15, 2022 at 10:47 am
Shades of Paul Volker in the early ’80s raising the prime rate to stop the Carter inflation. Didn’t he even get it to 19%?
That would cause economic collapse. Heck, 9% would do that. To be honest, economic collapse might be unavoidable.
There’s that old saying that paper money always returns to the value of the paper.
Danny's not here · June 16, 2022 at 7:28 pm
Suck it up cupcake. Speaking of sucking … ahh never mind.
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