Posted on 08/03/2024 12:22:15 PM PDT by MinorityRepublican
By opening the door wider to an interest-rate cut in September, the Federal Reserve is on a collision course with the presidential election.
For a central bank that judiciously aspires to stay above the fray of partisan politics, confronting a potential policy shift around election time amounts to a lose-lose. Delivering a rate cut ahead of the election could rile up Republicans and former President Donald Trump, but withholding a needed reduction could undermine the economy and upset Democrats.
The awkward optics give extra incentive for central bank officials in the coming weeks to set expectations for and explain the reasoning behind any sequence of rate reductions they could initiate at the Fed’s next meeting, in mid-September.
Fed Chair Jerome Powell continued a long-running effort to lay such groundwork on Wednesday when he said his attention was squarely trained on ensuring the Fed could bring down inflation while preventing past rate increases from tipping the economy into recession.
“Our focus is strictly on that,” Powell said.
(Excerpt) Read more at wsj.com ...
Why would you cut rates when there’s high inflation? They should be raising rates until it is gone.
The economy is starting to crash. So they want to prop things up until the election. They’re not going to care if we have 20% inflation in January.
To hell with politics - do what’s best for the country!
Silly me, I look at it this simple way.
What is inflation doing? And I don’t mean us the GROWTH slowing. I mean, is it shrinking?
If yes- lower away.
If no- raise or maintain.
Seems to me that if they lower rates, inflation will run amok.
Go for it - every investment I have will rise in share price back to where to was
Stagflation. Welcome Back, Carter.
> Why would you cut rates when there’s high inflation? <
People are not happy with the borrowing rates on mortgages and cars. Gotta make them happy before the November election.
Cutting rates will fuel inflation. But the effect will be gradual, at least at first. Nobody has time to worry about that. Gotta get Kamala into the White House. That’s Job One.
If they think housing is tight with high rates, do these folks think it will loosen up with lower rates?
Next they will be talking “stimulus” bills.
The FED has tipped the scales in favor of the Democrats before (like in 2018).
Like the Fed? Nothing “federal” about it. They take OUR money and “lend” it back to us at an interest rate they determine. Billionaire thieves.
There will be $36T in debt by November.
About 8 is residual QE at the Fed. About 8 is foreign held.
The rest is domestic, semi mandatory holdings at pension funds and various other institutions.
Only that 8T residual QE refunds interest to the Treasury. The rest is interest liability.
The composite interest rate is currently 3.2%, which is below current rates because past rates have not matured and rolled over yet.
But 3.2% And Rising is the number and precisely nothing else matters. There is no solution. There is no fix. Forget all of this fiscal conversations. Nobody is going to do anything.
Back to the border and the Swamp.
People deserve high rates for electing Biden/kamalian
Wait until yearly interest payments on the gargantuan, and growing, federal debt crowds out defense, entitlements, and just about everything else. Then we’ll have real misery and chaos.
Dumb article.
A rate cut is guaranteed .
The economy has one foot on a banana peel and Friday made that clear .
The question is how much will they cut and how many more cuts are coming .
The Federal Reserve and the Income Tax are two of the most evil things ever to be enshrined into law. Didn’t JFK want to get rid of the Fed right before they got rid of him?
You cut when it’s time to cut, you raise when it’s time to raise. The FED has been pointing at Sept for months, check the dot plots. There is no mention of elections in the FED’s mandate of operation.
If that were the case then there would be no Fed.
it appears that government measured inflation has been steady at about 3% for about a year (i know, there is a difference between government inflation and reality, but these are DC and NYC policy makers, so some deference must be made to their reality versus the real world).
SP 500 and DJI have declined since july 16. SP500 by 7.5%, DJI by about 3%. The trend (imho) seems likely to continue for the medium term future if no intervention.
the measured inflation is much less than carter era inflation (roughly 20%) in the late 1970s. That era could be viewed as the maximum that Democrats are willing to go.
If the premise is accepted that the central banks largely control politics excluding trump, and want trump gone, then it seems logical that the fed would somehow decide that its policy (always shrouded in voodoo economics magic) would suddenly decide that a change of policy was needed because (invent silly economist supplied reason here). the new policy of choice would be everyone’s familiar old friend, QE.
What are we up to now, QE5 (in 2019?)? so the new QE could be QE6? alternatively, they could come up with a new name for the old medicine. Anyways, printing fiat money and lots of it, starting this month so as to give some time for the money to percolate through the system and have a positive effect on the stock market.
typically, it takes only a few days for the stock market to recover. the fanfare tends to drown out other less flattering economic news. if good news is required in october for a november election, then the QE injection must occur between now (august) and next month (september) so as to ensure favorable monthly stats and headlines for biden ... woops, michelle... woops, kamala in october.
so for democrats to win in november they need a fed change in direction, come hell or high water, just about now.
and anyways, math-wise, imho we don’t have much of a choice than to print more money.
https://www.youtube.com/watch?v=Nzo6DMuZkOo
(and of course i could be totally wrong...)
:-(
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