Sorry if I don’t join you on a 1/4 point reduction in the rate is going to be the end of the world.
By that logic, interest rates should always be insanely high, that way no one will ever over leverage.
Remember, lower bond yields, equal lower interest payments having to be made by the Treasury as well.
Probably the main counter argument to the rate drop, is well if things go to poop, you are already at 2%... you can’t go much lower to stimulate growth should serious contraction begin.
As long as there are bigger fools there will always be bubbles, regardless of interest rates.
“Sorry if I don’t join you on a 1/4 point reduction in the rate is going to be the end of the world.”
I NEVER said it would be the “end of the world”. Even 2008 was not the end of the world.
But, even when it not the “end of the world”, it can be a bubble with its eventual collapse, the losses from its collapse, and some months or years of adjustments due to the bubble and its collapse. I think we will always manage to recover. The problem is the pain during the recovery and the unnecessary nature of it all when the bubbles do not need to be supported in the first place.
“By that logic, interest rates should always be insanely high, that way no one will ever over leverage.”
Nonsense. My point was NOT and never has been HIGHER interest rates. My point was the Fed did not need to move in either direction at this time.