Posted on 08/01/2025 8:01:22 AM PDT by lasereye
The two Federal Reserve governors who dissented from the central bank’s decision to hold interest rates steady this week said they did so, in part, because they worried about the health of the labor market.
“While the labor market looks fine on the surface, once we account for expected data revisions, private-sector payroll growth is near stall speed,” Fed Gov. Christopher Waller said in a statement posted on the central bank’s website.
(Excerpt) Read more at marketwatch.com ...
Fed Chairman Powell apparently believes it's his job to do something about potential price increases due to tariffs. It is not. It's his job to prevent inflation induced by excess money supply growth. Only excess money growth can produce continual inflation. If tariffs increase some prices it will not be continual.
Powell is not an economist. He holds degrees in politics and law. He consults with some economists. I wonder if the ones who have the most influence on his decisions happen to be Democrats by an amazing coincidence.
Deficits and inflation are too large. The stock market is too high. If anything, interest rates should be raised.
the dissenters’view was borne out in this a m’s labor figures that show softening. who thinks an economy can boom without the housing market and manufacturing? now Tsy rates dropped in open market today possibly getting out ahead of a more certain coming Fed cut, this based on employment #s. it was a tell Tsy prices did not rise on higher PCE yesterday.
These Fed governors need to call for Too Little Too Late Powell’s resignation.
He is purposely trying to destroy the country.
Deficits and inflation are too large. The stock market is too high. If anything, interest rates should be raised.>>> Agree. They should be concerned with inflation the most.
It is a stupid policy to cut the interest incomes of low-income American senior citizens so Mexicans and Hondurans illegally in this country can have jobs building new houses at incomes that are far, far higher.
Bad jobs report today just two days after the Fed decided not to cut rates. Stock market plummeting.>>. The Feds job is not to manage the labor and stock markets it is to insure money supply and inflation control.
Federal Reserve governors? What the hell is that?
And why do they keep calling it the federal reserve when it has nothing to do with the federal government?
This is massive fraud!
That's some serious delusion there. First, on Deficits, we have a party in power that is openly seeking MUCH less spending, and already doing significant amounts of cutting in numerous areas of the Executive Branch. Secondly on deficits, a high rate makes servicing the debt FAR more expensive, and makes it much more difficult to reduce the deficits. Your "solution" of higher rates makes the problem worse, not better... but maybe that's what you want.
On Inflation, the rate was down to 2.3% in April, which is almost in the Ideal Range of 1.9-2.1%. Once again, RAISING the Fed rate instantly INCREASES inflation, so once again your proposed solution has the exact opposite effect of what you're pretending you want.
As for the stock market, all 3 indicators are at or near all-time records... which is a lovely talking point... but if you simply graph a regression line for the overall growth of the markets, all three are just about exactly where they would have been expected to be, even if you drew the graph back in the late 90s. The current data point for each is on or near that regression line. It is on pace for sustained and stable success. Pretending that this is somehow "a problem" simply shows that your focus is not on sustained economic success, but something else.
The Fed's job is to make sure that the money supply is not growing out of pace with the supply of goods (which they also grossly failed to do 2-3 years ago, as they did their best to try to hide Biden's incompetence and the open greed of the Left). There is NO way to explain the Fed's incredibly disparate decision-making across these two Administrations, other than open political bias. The Eurozone's Fed rate is at 2%. Japan's is below 1%. Ours is nearly 5%. There is ZERO reason to keep it there, and the market has met EVERY one of Powell's stated targets for reductions... and he still refuses to do it, so that he can join the Left in their "delay-delay-delay-deny-deny-deny" strategy for the next year or so until the Midterms. It is the ONLY card they have left to play.
If one wants to create jobs in the construction industry, extend sewer lines.
“Stock market plummeting.”
Stock market not ‘plummeting’, it was overbought and looking for an excuse to take profits.
Powell is really in a bind now.
Local Real Estates Sales & Bank
Now paying 4.5% on 5-year CDs.
Now issuing 4.5% 5-year adjustable-rate mortgages to our buyers.
House
For Sale
Price $440,000
Take out $300,000 mortgage now.
Agree to take out a mortgage so we can get the agreed sales price within 36 months.
Have your parents agree to pay us $600 a month starting August 2028 until we get the agreed sales price from you.
Here is the problem with your logic.
The greatest driver of inflation is money printing by the Federal Government. That is fact.
The greatest cost to the Federal Government is the interest payment on the Debt.
Ergo, your making it worse by keeping the interest rates high. It submarines the economy, drives inflation further, and increases the next payment for interest. Is a cycle down the economic drain.
The simple solution is to cut spending, and increase revenue. The best way to increase revenue is to CUT TAXES to get back on the Laffner curve to maximize revenue. The best way to cut spending is to get: 1) Congress to actually pass a budget 2) Allow the Executive Branch to NOT spend all appropriated money 3) Let the Executive ‘renegotiate’ the Fed interest rate. 4) Force Congress to pass a balanced Budget 5) Grow the US economy-—not foreign economies.
So far Trump has done a very good job in 6 months of addressing everything except getting Congress to pass a balanced budge. That’s not in Trump’s control.
The Federal Reserve is, IMHO, trying to tank the economy to politically hurt Trump. They are also profiteering from the increased interest rates. It’s not about inflation or the economy for the FED anymore.
“The Eurozone’s Fed rate is at 2%. Japan’s is below 1%. Ours is nearly 5%. There is ZERO reason to keep it there, and the market has met EVERY one of Powell’s stated targets for reductions”
“Japan 1%”
The Japanese interest rates have long been artificially low. Japan now also has a declining population (and I believe real estate prices to match) and many Asian tigers nearby to keep most consumer goods pricing soft.
“Eurozone’s Fed rate is at 2%”
The Eurozone has better fiscal management than the USA.
“the market has met EVERY one of Powell’s stated targets for reductions:
Trump is opening up the US oil production sector. Oil prices have dropped. They can’t keep dropping at the same rate year after year.
There’s also the BBB. Few people thought it would get passed by the Senate. It will increase the demand for money every year in line with the increased annual deficits.
“3) Let the Executive ‘renegotiate’ the Fed interest rate.”
“The Executive” is a guy whose family real estate company that might be paying on a billion dollars’ worth of mortgages.
The low-income, CD-dependent old folks of Florida shouldn’t have their meager incomes reduced so a billionaire and his rich offspring can get richer.
Well said
“Only excess money growth can produce continual inflation.”
You forgot (or don’t know about) British estate agents telling listers to ‘test’ the market.
You’re forgetting labor unions fighting at every contract opportunity to improve the pay and health care benefits of their members.
You’re forgetting the PPACA and other legal mandates that drive up employer health care costs.
“Powell is not an economist.”
Financial instruments could include contract terms that adjust interest rates according to the pricing of specific items:
The interest rate on this mortgage shall be adjusted to the National Homebuilders Association Computational Formula 1 ARM rate every five years.
SALES CONTRACT
The seller(s) agree to buy down the interest rate on the buyers’ mortgage during its initial five-year term by 1% to be paid by withholding the needed amount of the bought down interest at the time of closing. The buyers agree to pay the associated fees since they are the people selecting their mortgage.
“a high rate makes servicing the debt FAR more expensive, and makes it much more difficult to reduce the deficits.”
There’s nothing to be done about old federal debt except pay the interest rate required, unless it can be called.
Going forward, President Trump can tell Bessent to issue only short-term debt.
If the low-interest rate crows are proven right, the market bid rates for Treasury debt will fall.
They are right?
There’s Treasury Direct for those who truly think the federal government interest rates are too damn high and have some money to ‘cash in’:
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