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Comment by p4coder | Hacker News Reader

Rent increase has been one of the biggest contributor to core inflation [0]. That has caused fed to raised interest rate at a rapid clip and cause the market crash. So is an algorithm responsible for the blood on wall st?

[0] https://www.corelogic.com/intelligence/the-role-of-rent-in-i...

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1. Inflation goes up.

2. Fed raises rates in response.

3. Mortgages get more expensive.

4. Rents, which compete with mortgages, get more expensive. They are also part of core inflation.

5. GOTO 1.

I left out the "break" involving massive unemployment and political unrest.

The cause of inflation is excess money created by the Fed (i.e. things like the $2 trillion "stimulus" package).

The rest is the Law of Supply & Demand.

https://fred.stlouisfed.org/series/CP

Increased profits gaming the public impression of inflation play a huge role. See the FRED chart above. Profits increased 1 trillion since 2020, thats something like 3300 dollars per capita.

You realize that inflation increases profits too?

If we’ve had inflation of 15% over the last two years then a 15% increase in nominal profits is a 0% increase in real profits?

> cause of inflation is excess money created by the Fed (i.e. things like the $2 trillion "stimulus" package)

You’re mixing up fiscal and monetary policy. Congress and the Fed.

...very much as usual. There's a lot of well-poisoning going on in this discussion, from multiple sources.

The Fed creates the money that Congress wants to spend.

That's very much not how things work.

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