Posted on 07/04/2025 6:48:41 PM PDT by NoLibZone
The right thing is to increase rates. Low rates encourage borrowing and inflation.
For too long, politicians have tried to create the illusion of a strong economy by stimulating spending through borrowing.
I assume Trump wants to do the same. Short term stimulus, no matter the long term debt.
Realtors, like Trump, love low rates. It encourages home sales and rising real estate values. (And also making it harder for first time home buyers).
I agree. Powell is making excuses for not doing the right thing for the American people. What people haven’t considered, is why the Fed is keeping the interests rates high:
1. HUGE return to the banks right now. The biggest federal government expenditure is servicing the debt. Private loans are also very profitable for the banks.
2. Many banks are in trouble due to bad debt. Cutting off revenue stream by reducing the debt, could push banks into insolvency. This could create another crisis, which probably wouldn’t be bailed out by Trump.
3. They don’t like Donald Trump, and if Trump fails economically like the democrats predict, then they don’t have to feel threatened by public choices for a long time.
4. Politically, they are connected to worldwide banks and bankers, and while Trump is good for Americans he may not be that good for the worldwide bankers.
5. Ideology: The richest Americans, especially bankers, tend to be ‘liberals’ ideologically. Which is odd because the socialists usually take them out first!
6. Credibility. The Fed cuts rates and the economy booms, then the Federal Reserve, Powell, will look like political losers and obstructionists. Not a good look for a ‘private’ system with an aggressive American POTUS.
What I are the possibilities:
1. The Fed will relent. Interest rates going down will cut government spending and quickly come close to balancing the Federal budget. That will be huge for private economic growth. It’s like the entire economy is waiting, loaded and primed, for rates to start to go down.
2. The Fed will delay longer and longer, with no data to support, until a conflict with Trump becomes unavoidable. The Banks feel they can win, overrule the people, and retake liberal control now that all other means have mostly failed or are failing. It’s like another assignation attempt, just economically.
I think, based upon what I have seen thus far, that the bankers want to take on Trump. Hurting the economy hurts Trump, and they are all about that now. They aren’t actually taking on Trump, they are taking on the American people, but they think they can polarize the public via the media to a great extent. There is a good chance, that Putin and Russia know of this, which is why they continue to pursue the hopeless conflict in Ukraine. Putin’s recent refusal for a ceasefire tell me he has other cards, and I think the Bankers going after a Trump may be one of those cards.
Anyway, it’s to a point now with the Fed, that the excuses look stupid and hollow, as you noted. There is a conflict going, it will likely escalate, and the banks aren’t about the people.
At least savers are no longer earning negative interest rates on their bank savings accounts. That seems to bother Trump and Bannon.
Thank you - I was waiting for that. LOL!
President Trump needs to have rates come down in order to refinance the long term debt at lower rates. When Democrats are in power, they refinance short term debt when rates are lower.
Poewll..democrats doing whatever they can to sandbag Trump/America.
“Any drop is going to launch more inflation.”
It didn’t during Trump’s first term. Then came the covid hysteria, Biden and artificial man made chaos.
Powell is like another Biden and he loves the ego of the job.
Such abuse is what always happen when bureaucrats have too much unchecked power.
Nonsense.
If Trump gets his way, buy gold/precious metals before rates drop—even at their current high prices.
I remember him. Well played!
High rates are keeping people from moving house and seeking new opportunites, making empty nesters hang onto large homes they don’t really need because their mortgage is still 2%, and locking young people into perpetual adolescence because the price of a first mortgage is too steep.
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