Heck I remember double digit interest rates in early 1980s.
Why does that fed buying bonds lower interest rates.
President Donald Trump is calling on the Federal Reserve to cut interest rates by at least a full percentage point “over a fairly short period of time,” saying that such an action would make the U.S. economy even better and would also “greatly and quickly” enhance the global economy.
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That would be about right.
The Federal Reserve is manipulating short term rates to be about a point higher than what the market would charge.
Heck I remember double digit interest rates in early 1980s.
It really sucks to not be able to make any money on savings accounts anymore. And while inflation continues it steady slow climb. No wonder people don’t save money anymore.
Does Trump hate savers? After inflation, we’re already earning negative interest rates on our bank accounts, while the prices of the things we are saving for are increasing.
??? What the hell?? Cutting interest rates willy nilly is not exactly great economic theory. Wish Trump would keep his mouth shut on this - or at least do this behind the scenes.
A couple of things...
Credit card companies tie the rate they charge to the Fed rate. I think a quick check of the historical data with show you that most credit cards are charging a higher “X number of points above the Fed rate” than ever before in history.
I remember my parents having an 18% credit card when their mortgage was 12%. All things being equal, my mortgage is at 3%, so my credit cards should be at about 9%. My lowest is 13% and I have some that I do not use that would charge me in the mid-20’s. Banks are taking advantage of low Fed rates and making a mint, but should the Fed lose it’s mind and raise the rate to say 4% (which would still be historically low) nearly all credit card rates would be in the high teens or twenties. Consumer spending would come to a grinding halt.
Second...I am pretty sure the Fed is (mostly) ignoring Trump and Trump knows this. Should we slip into recession, this gives him cover. “I told them to lower the rates” will be his clarion call should we have some bad GDP numbers.
Third...IF we should possibly slip into recession, it will be because of turmoil caused by companies moving their production out of China. I have received five emails today alone from suppliers warning about supply chain issues resulting from manufacturers leaving China. This is going to be a long term win, but in the short term it could result in a temporary rise in prices as supplies get low.
Also remember, NO ONE in Washington is Trump’s friend. He may have allies of convenience, but at the first sign of trouble he will be alone. The Wall Street money people are happy when they are making money, but should there be the slightest disruption, they will throw Trump under the bus. The next 15 months will be an unending stream of exaggerated claims of impending financial doom, all of which will be Trump’s fault. Good-bye “Russian collusion”. Hello “everything is Trump’s fault.”
Rates are already low. Want to spark the economy, SCHOOL REFORM.
Most people, either directly (home owners) or indirectly (renters) are subsidizing the biggest waste of money going, public schools.
Public schools are failures, little return on the money. Many people in New York with a $250,000 - $350,000 home pay $500 or $600 PER MONTH in school taxes. Imagine if we had school competition and reduced costs and increased quality. Imagine every New Yorker spending an additional 2 or 300 per month? That would juice the economy, people would save more, etc.
We are constantly overlooking the dire need for school reform. And, imagine if a good college was half the price, kids would have little or no debt and if we had college alternatives?