The Fed is not tanking the stock market. Bond and bank account interest rates can’t get much lower — they are are low enough to be negative after inflation. Savers are getting killed by low rates. The Democrats are killing the economy with socialism and junk science environmentalism, and Trump responds by going after the Fed and the Chinese.
The Fed is not tanking the stock market. Bond and bank account interest rates can’t get much lower — they are are low enough to be negative after inflation.
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When the fed raises rates it has a huge effect on the entire market. It is much worse than just overnight deposits and rates.
When savers can’t make money in the bond market they naturally go to stocks and vice-versa. The economy is doing better than it has for over, well over 50 years, it could do better if it were given more freedom.
The problem with capitalism is that it tends to boom and bust. I think, hope the Fed is doing what it is doing because it is trying to smooth out the boom/bust cycle by holding down the boom to reduce the bust. As long as there is money in pockets there will be demand and demand is what runs Capitalism. As long as there is demand someone will be willing to support it by supplying what is wanted. Money then flows to people who are willing to spend the money on ways to supply more goods to the economy. This satisfies demand and holds down prices because of competition for satisfying the demand. It isn’t rocket science.
When the government gets involved and gives incentives for suppliers of demanded goods to produce in other countries it takes some of the capital out of the American market. Trade agreements have done that with China and Mexico. China has been built on the back of American capital. I would say the same thing in Mexico but the money has not been treated well there. Much of our capital has gone to graft which takes capital from the suppliers on both sides of the border. Reducing capital in the market decreases production which increases prices and increases demand making the rich richer and the poor poorer. The current administration led by campaign promises of DJT during the election are removing some of the obstacles to production and removing the advantages to producing off shore. The importers from China who have been making a killing on off shore production are livid and will do all in their power to return to the old ways. It is a persuasive argument to allow China and Mexico to produce it cheaper than we can. The problem is the reason Mexico and China can do this so well is because of the support we are willing to give those countries who flaunt our regulations and environmental standards to undercut our producers.
Traditionally and even still today the American factory is the most productive worker for unit of money spent on them in the world. That means if the laws were the same in Mexico, China and the US it would be cheaper to produce in the US. We should all support “Made In America”, it is good for all of us.