I would imagine dropping rates right now would be tossing gas onto a fire that is burning just fine.
If we truly come out of the quarter at 5%, the would be wonderful. We don’t need 7% or 10%.
And a dow at 100,000 in three years would lead to an inflationary nightmare.
For those interested in interest rate trends…
See here:
https://www.nbcnews.com/business/economy/january-inflation-report-trump-tariffs-rcna258842
[EXCERPT]
Friday’s report comes just two days after the delayed January jobs report, which looked positive for the month but included major revisions to recent hiring data that painted a gloomier picture.
Preliminary data had indicated that the U.S. economy added 584,000 jobs in 2025. But the Bureau of Labor Statistics revised the number down Wednesday to just 181,000 jobs.
The Federal Reserve has for months been balancing its two mandates — stable prices and full employment — on what some experts have described as a knife’s edge.
“Based on my forecast, we could be on hold for quite some time,” Federal Reserve Bank of Cleveland President Beth Hammack said Tuesday.
Hammack expects inflation to ease as the year progresses, but currently, she says, “inflation is still too high.”
Are the rules changing? It is believed AI might increase productivity so much that we have a risk of deflation. Productivity’s is increasing with fewer employees on a larger and larger scale.
Worth considering.