Fed rate increase = lower hifi prices?

Will the recent rate hike meant to slow down the economy result in lower hifi prices?

No.

[some words struck out to avoid answering a leading question]

@ghasley good to see some micro economic principles discussed, and usually people can agree on the logic as hand-waving and speculation is kept to a minimum.

The politics of water are pretty ordinary - sensible economists have left the building..  In my country it is bureaucrats who administer the politics.  The Nth Koreans could probably plan better.

I wonder if we could ever reach a consensus on which industries should or should not be allowed to price their products as they see fit?

OK, in the context of this thread, lets say that one such industry to have price controls is that of audio/hifi equipment.

Who or what would be granted the ability to determine fair prices?

edit oh, now this appeared -

I believe in free markets so I am equally opposed to price ceilings and/or price subsidies.

What was that little fair is fair motherhood statement?

I don't pretend to understand what people mean by the term "price gouging". 

I googled it and it was explained as a situation where in times of emergency (however defined) certain goods are subject to rationing to prevent things like hoarding.   Price gouging then occurs if some people find themselves with more than they require on-sell for an exorbitant price.

Has that happened?  Did I blink?

@daveyf nobody is condoning anything that is illegal. That would have been contrary to any emergency regulations that were swiftly put in place. Perhaps not by the letter, but at least in spirit. Judges are not amused by those antics.

What I’m seeking is some non-emergency examples of pricing irregularities in hifi that cannot be explained logically. Coz people just say stuff and say, oh, price gouging, huge profits.

I understand that respected tube sellers rationed recently, and kept prices not too far away from normal. Because reputation and credibility. Think.

@cd318 I had a lot of time for Keynes, I particularly liked his suggestion of burying bottles full of pound notes and letting folks dig them back out as a way of easing mass unemployment.

Our brains are hardwired differently.

The owner of the pound notes could have kept them in the bank earning interest and then at a time of unhealthy levels of unemployment allowed willing folks to clean toilets or care for the elderly for which they will be paid with those pound notes.

@mikeydred "price gouging"....lol......as if printing money endlessly, massive deficit spending and handicapping domestic energy have nothing to do with it.

The Fed has just recently (in the last weeks or so) reverted to no net increase in its "money printing" (quantitative easing, QE) campaign.

QE is designed to flush the economy with liquidity, for financial institutions to spend on buying shares and real estate and to lend it out if they feel like it to audiophiles not wishing to miss out.

Some countries ceased QE last year, eg, New Zealand in July, and are now going the reverse and reducing their bond holdings.

@deludedaudiophile I concede there are other aspects on the demand side unique to hifi without going into details. Plenty. What you are thinking about is actually different markets. That's a significant aspect.

Except to point out that elasticity is a marginal (in the economics meaning of the word, incremental) concept. Its quite a neat thing to understand in a variety of contexts - being a ratio, it is almost unit invariant.

Maybe a bit like gain in electronics?

@headphonedreams I just looked at speakers and many brands have increased or is increasing their prices with 20-40% !
I have a distinct feeling these new prices will not go down much the next 2 years.

At a basic level, input prices have increased. How much wood (mdf) goes into a speaker? In America, wood/lumber prices have tripled or quadrupled since 2020. That must hurt a little bit.

There may also be issues regarding speaker/transducer availability - I’ve seen stories here about folk having some difficulties securing those round things.

And that is all I know about speaker construction! As for all that air inside, well, its like a bag of chips, innit?

I’d reckon that the market for speakers is fairly competitive, manufactured both in America and internationally, together with "cottage" (independent) outfits - although international shipping costs have also increased substantially.

That’s my simple take on the supply side. The demand side (buyers) - is another story, but my intuition suggests that demand for audiophile kit is pretty inelastic which does allow dealers to take advantage of any supply issues to bump up prices if stock availability is a bit hard to come by, without suffering much loss in turnover.

I reckon 20 - 40% is quite explainable in the circumstances.

In the meantime, estimates of official monthly inflation figures due out on Wednesday in the US are around 0.2% or so. Yeah.