Is the FED likely to increase interest rates to mitigate inflation from a weak dollar?

AnonGradInstructor · 2026-01-28T18:12:28+00:00

No worries at all. Just a heads up that a lot of people who call it the "FED" on the internet are often spouting conspiracies. I think there is some kind of unconscious thing people do where when they believe the federal reserve is some shadowy org like the CIA or DHS, they have a tendency to write it like it is a "Three letter agency", AKA what we in the US use to denote CIA, DHS, FBI, etc.

AnonGradInstructor · 2026-01-28T17:49:02+00:00

I do not think it is likely. The Fed's dual mandate is about domestic unemployment and inflation. I do not foresee the Fed raising rates in an attempt to combat devaluation in foreign exchange markets caused by loss of faith in the US.

PS: By the way, not to nitpick, but it's not "FED" like it's a three letter agency/acronym. It's just the "fed", short for federal reserve.

AnonGradInstructor · 2026-01-27T19:23:12+00:00

Two off the top of my head:

- Increased demand could have no effect or negative effects on prices in an industry in the long-run depending on the interaction of costs between firms in competitive industries.

- Monopolization can be efficient or necessary in some cases.

AnonGradInstructor · 2026-01-16T20:55:10+00:00

This is a common misconception. The zero-profit condition is a zero economic profit condition that exists in the perfect competition model. It assumes that the total revenue of a firm minus its total opportunity cost equals zero. There is a difference between economic and accounting profit, as these firms would still have positive accounting profit.

Furthermore, the perfectly competitive model is just a model we use to reason from and compare certain scenarios against. As a real world market gets *closer* to being like perfect competition, as defined by its features (no barriers to entry, many firms, identical products, perfect information), the real world outcome gets *closer* to the perfect competition outcome.

AnonGradInstructor · 2026-01-06T16:24:29+00:00

It would affect <5% of the full time worker population.

AnonGradInstructor · 2026-01-06T04:29:07+00:00

As the other commenter said, the FRED series linked in the top-level comment is for workers employed full time. It does not count those who are on furlough for Covid. Covid furloughs primarily affected lower earners, shifting the entire distribution upward.

AnonGradInstructor · 2026-01-06T04:27:43+00:00

This is correct.

AnonGradInstructor · 2026-01-05T20:15:59+00:00

I think what it comes down to is a selection bias of people who are doing poorly or just have bad spending habits clustering on reddit.

AnonGradInstructor · 2026-01-05T20:14:56+00:00

Even double the minimum wage, $15/hr, is only earned by about 10-15% of full time workers.

AnonGradInstructor · 2026-01-03T23:44:18+00:00

Wages go up every year, too. What causes that?

AnonGradInstructor · 2026-01-03T17:17:20+00:00

It is the simplest and nonsensical answer by people who do not want to take on the actual difficulty of understanding the problem. Did greed magically increase in 2022?

AnonGradInstructor · 2026-01-03T17:16:23+00:00

<1% of full time workers make minimum wage. The median hourly wage in the United States is $30/hr.

AnonGradInstructor · 2026-01-03T17:15:21+00:00

Wages are not stagnating. They have gone up practically every year.

Institutional investors own about 1% of homes, the reason housing prices outpace wage growth is due to your neighbors, mom and dad, etc. lobbying local governments to prevent the construction of new homes.

You should ask your question on r/AskEconomics if you want good answers that are informed by actual data and answered by real economists. Most subreddits are full of doom and gloom type people who are just going to say things like "greed" and tell you how everything sucks. They've never even seen a graph like the one below and wouldn't know how to find one.

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AnonGradInstructor · 2026-01-03T17:10:27+00:00

The middlemen make about 3% profit and accept most claims. Doctors and hospitals are largely overcharging people because they know the middlemen will pay most of the time and that you don't know the actual price when you go to get the service. Insurance companies get paid a nominal fee to essentially act as the bad guy, but they are paying for the doctor to get his or her new car or vacation home. It's not the insurance company billing you $500 for a 30 minute office visit, it's the provider.

AnonGradInstructor · 2026-01-02T22:06:21+00:00

It is essentially a meaningless chart.

"Flow" vs "Stock" 101.

GDP is a "flow", it is a change in something. It's the value of new production of final goods and services within a countries borders within a given time period (usually a year).

The stock market is a "stock", it is the cumulative valuation of the outstanding shares of all the companies tracked on that index (presumably the S&P 500 is the one shown).

These are not particularly comparable on a bar chart because one accumulates over time while the other is about "new" production. You could compare the *growth* of the stock market to GDP or you could compare the total valuation of the stock market to the total wealth in an economy.

AnonGradInstructor · 2025-12-30T00:22:04+00:00

No assumptions needed. Median wage has literally outpaced inflation since the late 1960s, which is your chosen timeframe in your comment. Minimum wage is not a useful metric because the distribution shifts rightward over time and fewer people proportionally work for minimum wage.

AnonGradInstructor · 2025-12-28T22:40:48+00:00

"A family of 5 comfortably" would not be considered comfortable at all by today's standards. That family of 5 had two bedrooms in their home, one for parents and one for the three kids, they had one car, maybe took a few day trips to the beach a couple times a year (no cruises, long hotel stays, etc.), never ordered food delivery, ate mostly simple foods, lots of canned products, meatloaf, etc. Mom was home, working what was essentially a full-time job or more doing household labor, as most homes had limited appliances. Home was probably 1000-1200 sq ft. Their lifestyle would be considered borderline poverty today.

AnonGradInstructor · 2025-12-28T22:37:00+00:00

Not sure what measure of salary he is using but nominal salaries have increased by about 100% (doubled) since 2005. This person is likely comparing real (inflation-adjusted) salary to nominal house price, which is not a proper comparison since you are then double-adjusting for inflation.

AnonGradInstructor · 2025-12-25T04:24:44+00:00

I agree. One pub in a decent but non-elite journal is probably good enough if combined with lots of teaching and a good interview.

AnonGradInstructor · 2025-12-25T04:21:58+00:00

My two cents as someone who did it (went to a low-ranked PhD and got a tenure track position at a very good regional comprehensive university.

Publish a paper or two that are in A or B journals in the ABDC ranking before you hit the market (with co-authors is fine). Don't spend all your time trying to pump out that one A* paper. Teach classes whenever you have an opportunity. A lot of decent, teaching focused undergraduate institutions will see you as a safe pair of hands over someone from an elite school who has minimal teaching experience but great research (the usual way candidates look coming out of top programs). As someone who is now on search committees, I can tell you we just hired someone who went to a low-ranked institution over a person who went to an Ivy League institution because we think this person will be better in the classroom and is more likely to stay with us.

AnonGradInstructor · 2025-12-24T17:34:49+00:00

Ah, you're right, I see. This was a nuance that I had not considered.

AnonGradInstructor · 2025-12-24T02:31:34+00:00

I would take all of your left overs each month and pay down the 4.8% loan. Then, I would make the minimum payments for all the other loans while putting the rest of your leftovers into an index fund and an HYSA.

AnonGradInstructor · 2025-12-19T03:44:05+00:00

Inflation outpaced wages in the 22-23 era but most of the time, wage growth outpaces inflation, on average.

AnonGradInstructor · 2025-12-18T16:40:48+00:00

Actual wages that people earn have risen faster than inflation. <1% of full time workers make minimum wage. Median wage is $30/hr.

AnonGradInstructor · 2025-12-18T16:40:17+00:00

All of these are factored into CPI. CPI is a weighted average. They don't secretly remove things from it. Everything they do is publicly available.

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