Are $5 egg sandwiches a thing of the past? Let’s break down what happened yesterday… 🧵 1/9
I won’t admit I am getting old but when I was younger an egg sandwich at an NYC deli cost $1.50—I sound like my dad so I will stop—but everything is expensive now. It makes sense because eggs, bacon, salt, bread, gas for the grill, insurance, etc. are all costing a lot more. 2/9
The fight is underway ➡️ Yesterday, the #thefed raised interest rates by .5%, acknowledging the rising costs we’re all feeling, which is due to #inflation. 3/9
As I tweeted yesterday, #thefed’s goal is to slow down #inflation, just like pressing the brakes on a speeding car. The challenge is determining how hard to hit those brakes. They don’t want to stop the car, nor do they want to let it continue to gather speed. 4/9
Slamming the breaks—or raising rates too fast—can make things like buying a 🏡 or a 🚙, & even credit card balances become more expensive. If we stop spending because prices are too high, the economy will suffer as demand goes down. Jobs will be lost. 5/9
If #thefed is too gentle and the car keeps speeding, inflation will continue to hurt your wallet and the cost of living will increase. Breafkast sandwiches may not be the only thing we have to give up. 6/9
Raising rates too quickly can hurt the economy, and raising rates too slowly can hurt the economy, but raising rates at juuuuust the right pace can help the economy prosper. Not too hot, not too cold, but just right. 7/9
Just like Goldilocks, #thefed is trying to adjust interest rates just right. It’s a challenge—, I think they are moving in the right direction—but time will tell. I don’t want to pay $50 for egg sandwiches, so I am rooting for them! 8/9
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