I don't think numbers matter here.

Bond prices shooting up is a result of market losing trust in US, or it's ability to not default.

Dollar is famous backed by $700T military. But the world has seen how it failed to secure a strait.

The current US government has broken all kind of promises. I want to highlight two in particular - free trade and immigration.

World economy has benefited for decades on the promises of free trade. The tariffs have eroded the promise and trust.

The government is also openly supporting elements who are hostile to immigrants. Immigrants are the backbone of US economy, has been for over hundred years. Immigrating to the US requires years of preparation, long term planning, and giving up on other luxuries and opportunities. When the government starts breaking promises by changing rules and moving the goalposts overnight, it discourages participation.

At this point its probably more like 12% temporarily because the more correct way to measure it is to take the 1980s inflation measure (from before all the medelling to make it artificially lower) and raise rates by 25 bips every quarter until that number is zero, then back it off slowly

I dunno about the politics, but personally I don't think there is a generic "correct" value. The rate describes the state of the world, and the "correct" value is whatever accurately describes the state of the world.

There is a separate question though - is that state of the world good or bad for people? Is it better or worse today than it was yesterday? What can we do - collectively - to push it in a direction that best serves our collective interests? These are valid questions to ask, and I think each takes us further in the direction of politics.

>My canned response to people being upset at various policies or ratios, whether it is inflation, or bond yields, or market movements, is to ask them what they think the correct value should be.

Maybe find a better canned response? US debt has never been higher, and because of this even rates that are below historic highs can cause economic chaos.

> A 0.25% rate hike is going to cause a recession? How, exactly, would that happen?

I didn’t see anyone claim a single 25 bps hike will cause a recession.

The 30 day FFR futures (/ZQ) curve is pricing in an 80% chance of two more hikes by the March 2027 meeting and a 70% chance of 3 or 4 hikes by Sept 2027’s meeting. So, 50 bps predicted in the next 6 months and 25-50 bps more within one year.

Source is the CME Fedwatch tool: https://www.cmegroup.com/markets/interest-rates/cme-fedwatch...

I think we’ll need to go to 5%+ within the next two years if fuel costs remain elevated.

What results? Overnight interbank loan rates, yes, immediately. The effect of those rates on the economy? It will take time to propagate. Heck, some important committees only meet like twice a year.

And which party controls congress? I'll give you a hint: It's the party that spent decades advocating for irresponsible tax cuts without cutting spending[0].

[0] Yes, I know that the Republicans said that they were going to cut spending to match the tax cuts, but that never ends up happening.

The BBB, Iran war, and tariffs, something done solely by republicans, sometimes just the president, are the source of inflation, so you can attribute this situation mostly on Trump, and fully on republicans.

This president single-handedly raised tariffs on goods from all over the world.

Usually, months to years. The economy is a very big ship and slow to steer.

This particular crisis is quite abrupt, caused by a sharp jump in the price of oil. Most presidents don't really deserve either the credit or fault that they receive on the economy, but in this case there's a very clear and direct connection.

All good is due to MyParty, all bad is due to OtherParty.

There's not a constant cutoff. It depends a lot on what the president and the administration do. Does the president push the button and start nuclear war? They are the primary driver for the new economy. Does the president continue the same policies that were working for the last decade and continue to work for the length of their presidency? They might never be the primary driver.

Arbitrarily decided by the person with political convictions blinding them.

Yes, it happens to both sides. People convince themselves their side always makes right decisions, the other side always wrong.

The truth is that the secret sauce is in the pendulum going back and forth. The excesses of one side are soon erased by the other. It is working, as it has for many years.

Depending on who you ask, the mess we are in is caused by Democrats.

> The important thing is really who's on the girl's soccer team

I've not heard this expression before; can someone explain it to me?

But this being supply shock induced inflation means that raising rates will likely have little effect on lowering inflation.

I read the comment as: Trump’s policies are all forcing the US into stagflation so hard the fed has to do this, knowing it’ll cause a recession.

Fed actions typically take a few years to be felt, regardless of administration.

I wish they'd lost in 2020, that's for sure.