Posted on 06/12/2025 6:38:21 AM PDT by delta7
“ Which is exactly what the Fed did during the past Democrat administrations by keeping interest rates at near zero. ”
That’s incorrect .
Search “Fed interest rate decisions by date”.
You will see the Fed raising rates quite a bit starting Sept 2022 through July 2023.
The first drop was Sept 2024,
Then another one two days after the election .
The Fed has reacted to inflation not politics
Yes, Powell had no problem lowering rates into a headwind when Joe was in office. This is political and we all know it.
Bessent has to borrow money to refi the debt, which was juiced by Yellen at lowrates under Biden and now 1/3 is due to be refinanced
Rate cuts reduce borrowing costs…for govt and for consumers.
As post 13 shows
Yes there are other consequences which you focus on.
but I trust Trump and Bessent to make the best lemonade they can with the lemons Yellen and Biden left them
Pushing for a U.S. Treasury rate of 3.5% in this environment is like trying to rent a penthouse at Trump Tower for $3,000 per month. It would be great to get it, but it's just a wish because nobody is going to be renting to you at that price.
I'm almost certain that this is incorrect.
Much of what's being refinanced today is trillions of dollars in 5-year T-bills that were issued during the COVID fiasco at rates around 0.3%.
Investors are losing confidence in the U.S. dollar because even at a rate of 3.5%, the $10 trillion you reference in Post #13 (hypothetically speaking) is going to cost U.S. taxpayers $350 billion in interest payments every year instead of the $30 billion they paid on the debt that's maturing. That's a staggering difference. It's like having a 3% 5-year adjustable rate mortgage that resets at a 35% interest rate at the end of the fifth year.
yup. what happens if the 10-year yield increases if the Fed starts cutting rates? certainly wouldn’t help the housing market...
“”You will see the Fed raising rates quite a bit starting Sept 2022 through July 2023.
The first drop was Sept 2024,
Then another one two days after the election .””
Well then, I’m confused. The current inflation rate is supposedly only 2.4%.... way lower than what it was under Biden and almost what it was in 2019 under Trump. And yet, the Fed has STILL not lowered rates back down like they were under past lower inflation rate years. Why do you think that is?
And are you of the opinion that inflation was not kept ‘artificially low’ during the Obama administration? If so, please post a link to that, since it appears that I may have been misinformed. I was under the impression that, after the Democrats crashed the economy in 2008 to get Obama elected, the Fed utilized quantitative easing, which kept inflation low artificially... and therefore, tremendously helping the Obama administration.
It is my opinion, based on the stats I have seen, that the Fed favors Democrat administrations... and the numbers and history don’t lie. But if you have facts that prove otherwise, please post it.
https://www.usinflationcalculator.com/inflation/current-inflation-rates/
Inverted yield curve is generally associated with a recession or slowing economy, thus the fed cuts.
Inflation skyrocketed under Biden and the Fed tried to keep up.
It has leveled off and I think is very close to the 2.000% they want to see.
I think we are getting close .
But the financial markets are really what sets rates anyway .
Money can flow into bonds (lowering rates), or flow to stocks.
The mortgage rates I deal with are determined by buyers and sellers of mortgage bonds .
But the Fed does have a big influence , but in my opinion they are following/reacting to what’s going on versus setting rates.
“”But the Fed does have a big influence , but in my opinion they are following/reacting to what’s going on versus setting rates.””
Okay. I think the Fed is refusing to lower interest rates due to it being Trump... ie a Republican... in the WH. I think if it was a Democrat, rates would have already been lowered. Trump has a valid point re: that stance, IMO.
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