This is about where investment money goes, NOT about making more money for investment. Lower interest rates simply means investment instruments based on interest rates, like bonds, will likely earn less than the year’s ROI on stocks - appreciation and dividends together. It does not produce “more” net earnings, as fixed interest earnings will likely dip correspondingly. So a rate cut causes reallocation of where invested dollars are, more so than creating any new dollars to invest.
Actually, I think a “stable currency” regime did not need any rate cut at this time. If I am right, Powell could maybe not be doing Trump any favors if the rate cut creates a bubble that bursts in the next twelve months.
Just let me and everyone retiree withdraw 10% of their IRA’s WITHOUT being taxed. The government otherwise won’t see the withdrawals until age 70/half. Do it 12 months b4 the election. Watch what happens. Tax cuts for the rich? Damn right.
Maybe he can just do it "until he needs glasses."*
*Mother walks in on son who is playing with himself. Mother says, "Stop that, you'll go blind!" Son replies, "Ah, Mom, can't I just do it till I need glasses?"
"Inflation" is allegedly low, but I believe prices have gotten substantially higher over the last few years for things like homes, new cars and college tuition.
If the interest rate on a 30-year mortgage is 8%, someone can get a $250,000 mortgage for about $1,835/month. When interest rates are at 4%, that same monthly payment will get you a mortgage of about $385,000 -- a difference of $135,000.
Guess what happens when interest rates decline, folks. A home that used to cost $400,000 now costs $535,000. Of course, this doesn't count as "inflation" because home prices aren't actually included in the Consumer Price Index (CPI) used to compute inflation in the U.S.