Those are controversial subjects and you're changing the topic. That's why people will and should ignore you when you bring up subjects like that in a thread like this.
These are Prime Subjects, central to a decent lifestyle. You've got your values bottom-to-top when they should be top-to-bottom. Happiness is a personal condition heavily influenced by the market-economy in which we ALL live and to which we contribute (by means of our work and consumption). Key to that existence is a fair-and-decent sharing of the communal wealth we ALL help generate. Repeat that simple notion a thousand times until you finally understand it ... !
Of course you know that's ridiculous, given the power of the Fed and it's member commercial banks, the shadow banks, and the FOMC.
Then explain it to me. You can't - so you are reduced to one-liner sarcasm in a debate forum! Your comments are useless ...
"One of the most important jobs of the Fed is to manage U.S. monetary policy by modifying interest rates, buying and selling government bonds, and adjusting the amount of reserves banks are required to maintain." https://www.bankrate.com/glossary/t/the-fed/ "The target federal funds rate, which is set by the Federal Reserve Board, serves as the basis for the prime rate. The federal funds rate is the interest rate commercial banks charge each other for overnight lending. Generally, the prime rate is about 3 percent higher than the federal funds rate. That means that when the Fed raises interest rates, the prime rate also goes up." https://www.bankrate.com/glossary/p/prime-rate/
I don't think you understood what I wrote then. I don't think you even understand exactly what those statements quoted from those links actually means. The Fed doesn't have the legal power to set rates in the market. They try to do this, however, by making loans or borrowing money.
That statement is worded kind of ambiguously, pertaining to the context of our discussion. A more accurate rendition of that statement would be 'modifying interest rates by buying and selling government bonds'. But we're not talking about the "federal funds rate", we're talking about the market interest rates (i.e. interest rates in the economy). So bringing that up is kind of a non-sequitur. Nothing I had previously posted is inconsistent with any of those two statements you posted. I just wanted to make sure none of these statements were being used in a misleading way. I could be wrong, but those things you brought up simply seem to be obfuscating this, due to your lack of understanding of how it works. When someone says the Fed sets interest rates, I think you have to be careful of what that actually means and the context you actually use it in. Maybe better to avoid it in the discussion here since we don't want to turn this into an argument of semantics. The Fed is NOT legally allowed to set interest rates (in general). They do generally have the ability to and do attempt to set interest rates. It hinges on the semantic meaning of "set". So as long as you understand HOW they set those interest rates, we're good. There could be potential situations in the future where they are NOT able to set interest rates to what they want, due to economic factors.
And I think if you reread my post you'll see that's what I said. The Fed changes the federal funds interest rate. I know that's not "the market". That is what commercial banks charge each other on overnight rates but the prime rate is kept at about 3% more than the federal funds rate and the rates we pay hinges on the prime. There is no direct assignment of the prime interest rate by the Fed.
And I think that if you waited at least 5 minutes before immediately responding to my posts when you get an alert, we'd all be better off. It's common for me to still be typing out my post after I have already initially submitted the new post. (I do this to be able to immediately respond in a post right below your post) Ok, thanks for clarifying that. Maybe we simply had a misunderstand then.
This is your thread. Do you feel that my post takes the thread off-topic? If so I'll be happy to take it to a new thread.
I just don't see what your post was trying to get at, or how whatever point you were trying to make had anything to do with the Subprime Mortgage crisis.
I do that too, but I just happened to come back and check my alerts after being away for a while. If that coincidence bothers you, maybe you should think of a different way of managing the risk, because it happens. It has happened to me too but I understood it was a risk and didn't gripe.
The Fed has absolute 100% power which is why inflation/deflation is not 1000000% or 275% or 5%. Do you understand??
Are you bright enough to realize that what you posted doesn't contradict what I stated? Once again, you're playing a semantics game. I don't think you understand how the words "determine" or "set" can have more than one meaning in this context. The Fed has to lend or borrow money to try to change the market rates. That's what it comes down to. So it can be very expensive to do that.
Yeah, the Fed has to lend money at rates they set and that changes the market rates. YOU are the one playing a semantics game.
It's hard for me to tell whether we're on the same page. You agree that the Fed can't always lend money at whatever rates they want, right? They are faced with certain constraints in the economy.
Nope. Never said that.. Never believed it either. Raising and lowering rates is the key-component of the Fed to control a key economic variable - the cost of money (market interest-rates). Especially when an economy capsizes ... Legally, they are not "forced". They are independent of the Federal Government. Though a president gets to name their head. In fact, they are a "community" of national Fed-Heads around the country. Which is why it is called the FRB (Federal Reserve Board) ...