Posted on 07/30/2019 10:52:05 AM PDT by McQ444
As the Federal Reserve begins a two-day meeting widely expected to yield the first interest-rate reduction in 11 years, President Trump reiterated that the size of the shift matters to him. "I'd like to see a large cut," he told reporters Tuesday, before leaving the White House for Virginia. Additionally, Trump said, the central bank should immediately stop paring a balance sheet that ballooned to $4.5 trillion as the Fed purchased government debt and mortgage-backed securities to amplify the benefits of near-zero interest rates during a plodding recovery from the 2008 financial crisis. While Republican lawmakers lambasted the so-called quantitative easing program in the waning years of the Obama administration, Trump says reversing it and raising interest at the same time undermined his efforts in the White House.
(Excerpt) Read more at washingtonexaminer.com ...
How about just getting rid of them.
Let the market decide interest rates.
large cuts are impossible when rates are at such historic lows anyway
Rates have risen maybe 2% since Omoeba was defeated.
Reverse those hikes.
There have been 9 straight increases of 1/4 point. There’s lots of room to cut. But I expect a quarter cut for now. The FED can’t ignore the Bond Market, which really sets the rates. The yield curve is inverted and inflation is down to 1.4%. The FED can’t continue to ignore that condition.
FED will cut 1/4 this meeting or next.
The interest rate level is only meaningful in concert with the level of inflation or deflation. When we had high inflation money market accounts paid 16% interest and it took a Prime Rate of 21% to kill off the inflation.
Now we are very close to deflation, and only growing at 2.1%. Put that together with the inverted yield curve and it’s obvious the current FED rate is out of balance with the economy and the Bond Market.
“Let the market decide interest rates.”
Nice sounding idea, not happening. There have to be “guardrails” or there will be too much rate volatility. You can’t make long term investment decisions, like real estate developing, without some assurance of reasonable rate stability.
The Discount rate is the rate the Fed charges if you borrow directly from the Fed. The market is free to borrow from anybody else and whatever rate they can agree on.
The Federal Funds rate is the rate that banks are allowed to charge other banks when they have excess reserves at the FED. And according the article below, they don't even control that.
i am fine with a drop in the ffr
i only meant to say its quite low already
meaning that there’s not a lot of elasticity left in the ffr
but fine, let em lower it!
OK. That sounds reasonable.
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