The problems with trade and the collateral damage to the international economy are self-inflicted wounds due to Trump's policies. Once again Trump creates a problem and now he will claim credit for forcing the Fed to lower rates to help fix the problem. This slippery slide toward an authoritarian government needs to stop, and quickly. The American people are not going to benefit from Trump's bullying the Fed, even though the 1 percenters will.
3
Here we go again. Republiomics. Economy good, housing good, interest rate low, people working. So let's lower the interest rate. Our market manipulator in Chief will do anything to make himself look good. Something is brewing. Save your cash.
2
Instead of handling a growing economy in a wise thoughtful manner our blustering bully in the WH has bullied our allies and brought a near catastrophic trade war with one of our largest adversaries. No, it's not Mr. Powell who doesn't know what he's doing, Mr. President; it's you.
2
It's all absurd. Why is it necessary to have an annual inflation rate of 2%? Why is inflation necessary? Million dollar median home prices in 20 American cities??? 20? Haven't read that article... yet but the headline suggests plenty of inflation. More of the population is entering agewise the last quarter of their century.... so with a shady stock market... how do they deal with a potential 60% increase in cost of living on a fixed income?
IMO the Fed has been misbehaving since Greenspan who was himself very exuberant having married his great love. or was he a proponent of Chicago School (#Is tenure the same as socialism?) economics which seem to have landed us in Neoliberalism -- laissez-faire or vulture (near monopoly) Capitalism? Rising water but not all ships rise... some do sink. Maybe stock market 101 must be taught in high school in our "investor's economy."
The Fed despite whatever nonsense Wall Street spews should raise the interest rate to 4 %. Since Reagan, we''ve had trickle down... A trickles is not a steady stream.
Exactly what is in the inflation index??
2
Not once in this article is the word "deficit" mentioned. In 2007, before the Great Recession, the deficit was 1% of GDP. In 2009, During the Great Recession it ballooned to nearly 10% of GDP. In 2016 it was down to 2.6% of GDP.
Under Trump, with a growing economy, the deficit has grown to 4.6% of GDP with the deficit this year expected to top a trillion dollars. This is the largest deficit, as a percent of GDP, during a growing economy EVER. And it continues to grow.
Not one Presidential wannabe ever mentions the deficit. Trump never mentions it. But, the simple fact is, we have runaway debt growth during GOOD TIMES.
If I were Trump I would be afraid of a recession too.
2
We should be at 3.5% short term rates now. It is irresponsible to lower them on an economy that is still strong. Going back to 0% by next year will destroy savers even more and inflate this everything bubble to unimaginable lengths. Took us 10 years to get 2.5% and now they do the walk back. Maybe the economy is weak and vulnerable and we have been led to believe otherwise. Negative yielding debt worldwide is a failure of capitalism that needs to be corrected, that cure is normalizing rates not cutting them.
1
wow! This is just a game for the Forever Trumpers. If we have another financial crisis like 2008, there is no one in the current administration capable of guiding us through it. A real estate developer with a history of bankruptcies is our economic thought leader!
3
Complete and utter lunacy. The world and US economies are in crisis, the Fed is indicating its panic, yet US equities hurtle ver higher.
I divested all my US growth stocks two months ago, put all in gold instead, because I'm not investing in lunacy. The talking heads and the Fed complain about no inflation - has anyone looked at the S&P bubble since 2000? All inflation is tied up in a huge asset bubble of overpriced stocks, property, art, etc, in the names of a few percent of the population. The real economy grows at around 2%, inflates at around 2% and asset prices are unbalanced if they stray too far off course from that. This also explains why there is no middle class left. Assets to build one's life on and assets to retire on are unaffordable, even if interest rates to buy the unaffordable come down to 0%. In fact, the more interest rates come down the more only the rich can and do borrow to inflate their universe even more...
I don't care if the value of the S&P doubles again, I'm now of the view given the market's reaction to Fed rates that even investing in tulip bulbs would probably make more sense in the long term. In the meantime I might or might not make anything out of parking the little I'd rather invest in a growing economy in gold, but what can you do when the lunatics are running not only the asylum but also Washington and Wall Street...
The way to increase wages is through unions and reducing the monopoly power of huge employers like Amazon, Apple, and so on.
It's not rocket science.
2
Lived a long time, been through too much. There will be a Trump depression, my bones are my indicators.
3
The days of Modern Monetary Theory are fast approaching, the traditional dogmas of central banking are about to be broken. Technological gain and renewable energy has changed the economic environment. At long as rates are low we can cut rates to spur development, remember that the reported underemployment figures do not account for "gig" workers and under the table labor look at the U6 employment numbers, African American are JUST starting to recover from the recession.
1
The economy is allegedly booming but the Fed is planning to cut rates. They will over heat the economy and then they will have nothing left to help when it crashes but the billionaires don’t care because they will win either way. Trump has destroyed everything.
4
Mmnnnn, yeah baby! Fuel those asset bubbles! What could go wrong? Meanwhile, the child prince can play tariff wars with China. Good times.
2
Powell drinks the KoolAid.......
3
Rate cuts will not help the economy because the rates are so low anyway. If you can't run your business at fed funds 2.50, going to fed funds 2.0 is not going to help.
The serious problem in the economy is how much is being charged for consumer credit. A lot of cards are at ranges 15 to 25%. The Fed is basically powerless to lower these rates.
2
20 years from now when interest rates are 17% we’ll remind the youngsters when rates were zero.
A market that swings and breathes life for a half % rate cut is irrational. Fundamentals always rule in the end.
3
why this emphsis on the numbers of stocks. why not daily headlines on number of people without adequate healthcare? or daily number of homeless people? or the number of children going to bed hungry? or daily temperature extremes? where are your values?
7
Once Powell cuts rates by 50 basis points, miraculously in early '20 Trump will end the trade war, remove all the tariffs, to juice the economy........this is truly insanity.
5
The daily news tells us - the Economy is doing great. That being the case, does it warrant a rate cut? Would it not be more prudent to leave the existing rate as it is, delay any action for now?
If our Economy is great right now, why are we not seeing change in interest rates levied on Credit Cards? Should there not be a benefit for the consumer?
On a layman's standpoint, if our Economy is great right now, how would that impact our country's deficit management? Does this mean, our Treasury has more funds now. We should initiate paying off the country's Debt. A concern to all. We should now have enough funds to meet the long overdue Infrastructure projects. There are many other questions on the list.
Can someone please clarify?
4
Funny but the article states that the need for a Fed interest rate cut is in part based on the economic uncertainty caused by Trump's trade wars and growing deficits during an economic expansion. So he gets the interest rate cuts he wants by his chaotic and dangerous behavior. MAGA!
2
I dislike Trump as much as the best of you, but on this issue I do agree with him. The Fed Chair made a mistake when he raised the interest rate last December. Now six months later he sees his mistake and is un-doing it. This, for once, is good news. Hopefully they follow through on fixing this, and not just try to manipulate the market for a few days by talking about it.
@jj
Exactly what "harm" did that Dec rate hike do?
More sugar!! More sugar!! Good God this country has a short memory. Some day, the crater the Trumplicans leave will be so deep - even a Democrat won't be able to dig us out. Again.
5
The Fed is using all of it's foam to put out a non-existent fire. When the real fire arrives, they will have nothing. Stupid is as Stupid does. Leave some ammo in case you need it. (Or has the business cycle been repealed?)
5
@NotSoCrazy
Exactly. When the next great recession arrives, we will be toast. Or we will be Greece.
3
The gop will, yet again, crash the economy just like under W.
The Deems have to come to the rescue every time. It's disturbing how people are so fooled for trump.
3
It’s called caving into the bully in chief.
Everyone is too afraid of Trump to do do what’s right.
3
Basically he is protecting us from Trump's Fake Tariff Wars. Instead of signaling a rate cut which will lead to more inflation in the housing market, he should stay the course or even raise rates. He is also being bullied by Trump's stupidity in making up facts to justify a trade war. When inflation hits,we all suffer. I remember the years of hyperinflation when I paid 111/2 % for a mortgage and houses were selling like today.
1
Trump's appointee doing exactly what Trump demanded. Great time to sell.
2
So, with inflation about 2%, the Fed may reduce rates to, what? Juice the economy? Then what? Raise them to tame inevitable inflation?
2
Perhaps one or more of the Democratic candidates could talk about the trillion and a half dollars Trump and his tax cuts have added to the deficit and how that’s being charged to our kid’s credit cards. Seems like a huge, winning issue, far more so than the Fed’s monetary policy and rate cuts, which most people will never understand.
6
Why buy a bigger extinguisher when it's better to get rid of the arsonist?
8
So what happens when there is a real economic emergency, and all the work that Powell is doing to further Trump's 2020 aspirations leaves no wiggle room to maneuver out of such an emergency?
Is America just another one of Trump's casinos, at that point, where he just walks away from the wreckage?
14
@Alex Why should the Fed risk blowing out the flame of the recovery (yes, we're still in a recovery), so that the country can pay more interest on its own debt? The emergency you speak of could easily be set off by the Fed failing to lower.
2
China's foreign assets are now worth $6 trillion, but outside of the government in Beijing, nobody knows much about where that money has been invested and what conditions and risks are attached. from Der Spiegel
Only trump knows , wink wink
6
In other words...
The insanely rich are getting richer and the poor and middle class are not.
13
they don't call it the stock market a casino for nothing.
4
The Fed is supposed to be above politics, like the SCOTUS. But like every other agency they bow and scrap to the orange hrnace. This is not the time for a cut, but a modest Increase. This is no Janet Yellen, when inflation goes haywire is this guy even smart enough (let allow independent enough) to manage the problem? Trump is making sure the country implodes the day he leaves.
8
I’ve lived too long. Any chart of fed rate history I have seen would put the rates today in a desired zone. What will they be able to cut down to when it hits the fan?
Can someone explain this to me? My bank accounts pay next to nothing. The mortgage rate is reasonable. When I bought my first home in 1981 the rate was 16.75%. In a few years I could remortgage to a lower rate...10%. The next house had a comfortable rate of 5.5%. I wouldn’t like the return to double digits but ....seriously......what the heck is going on?
13
The rather one sided comments here (that Trump is responsible for the rate cuts by bullying Powell) reinforces the disturbing truth that general newspapers and their readers know very little to nothing about economic issues and their consequences. I don't blame the readers as much as the print and MSM which do a remarkably poor job (mostly because the majority of print and media journalists, themselves, know so little about economic issues) of educating the public about macro economic trends and cycles within the business community. So readers need to do a better job of learning these issues on their own. Read/watch Bloomberg; read Barrons on a weekly basis; read Marketwatch, and even watch CNBC from time to time. The economists on that network are objective and not cheerleaders for the markets. Learn how to read charts of stocks/bonds (see what the TLT and $TNX are doing in real time); follow the differences on a weekly (if not daily) basis between what the equities and the bond markets are signaling. And after all that, understand that market participants and economists may still disagree on what is the proper course of action. But none of this has anything to do with the man in the White House. Every president since Nixon has fumed and flailed during interest rate raises- it is simply the nature of the beast.
4
Nice long lecture that completely ignores Trump's berating of the Fed and the threats of firing its chairman if he doesn't do as Trump wishes.
As if it is just coincidence or sound policy that the rates are reduced just as Trump demanded they be.
12
@boji3,
Well, you must not be watching Squawk Box. Joe Kernan is the biggest cheerleader for Trump. No objectivity just pure unadulterated bias.
Perhaps you want to recant your rankings.
2
@Letty Roerig Does anyone actually ready what we write here. I stated quite clearly that I was referring to ECONOMISTS on CNBC. Kernen was a stockbroker. Educate yourself, please and read carefully.
This is great news for billionaires like Trump. It's less great for the half of America that doesn't own any stocks.
8
I have retirement savings mostly in stocks, so I gain, Not as much as the wealthy, but it's a short term boon.
But what could go wrong with a FED responsive to an ignorant President;s whims? Everything.
We already have had Corporations sitting on profits, or distributing them to shareholders and not reinvesting them. We hear that many are laying off marge numbers of workers.
They just received massive tax cuts --- a lack of access to loans is not the issue.
Why do we need an artificial kick to the economy which will not translate into more opportunities for those who need non-service jobs? which will not lower the exploding debt?
7
With the lowest unemployment rate in 50 years, and historically low interest rates pretty much across the board, it would seem Powell is throwing Trump a bone by expressing an openness to rate cuts when there is currently no justification for one.
9
In business, something Trump knows little about, you address the root cause problem if you want to solve it. The chairman described the root cause of the problem - which is not being addressed. Rather Trump wants a band-aid to cover the problems he created with his trade wars.
4
As a layman in this, it is confusing that they cut interest rates so that credit is easily available - this causes an expansion. And then they raise interest rates - making credit expensive and this causes a slow down. And then they cut interest rates.
I would guess there are definitely factors outside of this one factor (Interest rates) as to how things are going. But it is also surprising to see interest rates can be so influential.
I was watching US Squawk Box and Joe Kernan and Sen. Pat Toomey were talking about how they did not know who the fed chairman was in their day and how the basic idea is to invest in a good stock instead of looking at the Fed. And how important Fed seems to have become as of now.
2
Just another day of insanity. Up is down, down is up.
12
So much for an independent Fed. Clearly, that’s no longer true.
12
@Imperato America has sent its politicians a 100% clear message that it wants the cans kicked down the road and that's what they intend to keep doing.
8
Trump has surrounded himself with operatives who look after Trump's personal interests, not those of the American people. Powell is not as bad as William Barr in this regard but he is ignoring his professional training and instincts to do Trump's bidding - yes, the same Donald Trump who knows absolutely nothing about the real economy as proven by his useless trade wars.
10
So will Trump compliment Mr. Powell about his willingness to cut interest rates? Probably not, he usually just insults...
3
Another Supposedly Independent Agency Compromised!
They will do anything...for the Great Leader...
4
now do you believe the fed printing money and near zero rates helped the obama economy barely survive i.e. nearly flat for 6 years
3
Trump will do anything do delay a slowdown until after the election. Better a soft landing asap than a hard one later, especially with the corrupt, inept Trump at the helm.
6
This would be great news if you were as highly leveraged as Donald Trump.
3
Exactly! More Trump market manipulation for his own advantage.
7
The adage that "Bull markets climb a wall of worry." is certainly confirmed by a scan of the comments submitted here.
Yes this Bull market will certainly end at some point. And yes, there will major correction at some point. When? Much as I despise the current administration, I have no idea. Rather than trying to guess, periodic rebalancing is better in my experience, even when, and especially when, your total investment is small.
1
Yea things are going real badly. According to the front page of the NYT. If the liberals stay out our way when it comes to fracking, farming, making NATO pay its way and negotiating revising trade deals that have been hurting us for years, the economy will stay as good as it is.
2
Let the good times continue , thanks to our businessman president! We are retired with a 40/60 folio that still allows for some wealth accumulation, but can take hits as well.
Remember:”Scared buck$ go nowhere!”
1
When I hear terms like "uncertainty" being used as a basis for which to explain market movements, it makes me nervous. It seems like out little Wall Street Casino now runs on sentiment, as opposed to market basics. This feels like an artificial propping of the market for sure. So if conditions are so rosy, then why drop rates?
7
'Mr. Powell, testifying before the House Financial Services Committee, highlighted ongoing risks to the United States economy from President Trump’s trade war and a global economic slowdown, suggesting a cut may be likely when the Fed meets again later this month.'
So Trump's trade policies are messing up the US and world economies. Who could have predicted that? Well, just about every knowledgeable economist on the planet - note, none of those currently work for the White House. And remember, the Dow, which is up today, reflects the momentary wellbeing of the investor class, not the average Jane or Joe in the workforce.
Once again Trump needs a bailout for his financial mismanagement. Who could have predicted that? Well, just about everyone who voted for Hillary in 2016.
7
Lowering interest rates would be a disaster. It was the raising of rates that finally caused the economy to pick itself up off of the floor and start improving. Besides, millions of seniors are waiting for the Federal Government to stop impoverishing them with near zero interest rates and let their severely depleted capital start earning money again. Low interest rates have gone on for way too long. They need to be raised a good deal higher than they are right now.
5
What a relief. If the Fed Chairman isn't worried about the looming debt limit crisis, the lack of a budget agreement between Congress and the White and House and the possibility of another government shutdown, why should I be worried about it? Talk about your "rosy scenario" !!
1
It's not the Fed's job to trip up the economy so we can get rid of Trump. And there's no airtight argument to be made for going in any of the possible directions (up, down, or hold). Lots of people are jealous about the stock market being at an all-time high, but that's not the Fed's problem, either.
The Dow is a fantasy representation of the whole market. This is nothing more than new speculation and shady business dealing like in the late 1920s and 1980s
2
Insanity, I thought wall street is doing great. Why are they still getting bail out and easy money with rate cuts, where is the inflation. The chicken is going to come to roast at some point. The feds have to be objective and remove all these appeasement and political maneuvering. The poor will end up paying for all these mistakes.
3
A decade of absurdly low rates is creating a looking storm in corporate America. Much of our tech IPOs are companies that are losing millions a quarter. Investors are forced to put their money in stocks and the overreliance on stocks is causing huge bubbles to form.
7
.....which means that he has done Trump’s bidding despite his representations to the contrary.
6
When the pain finally comes it is going to be very, very bad.
19
I assume Mr Powell is not courting Trump by suggesting the Feds may lower interest rates. At least I hope not . When will the poor get richer and the richer poorer
10
I didn't go to the Wharton School of Finance, but with unemployment under 4% in the stock market at record highs, what possible argument could there be for cutting interest rates?
30
@Mike
My guess? It's artificial. There's no real reason to do this except prop the market up longer and ride it as long as you can. My concern is, what happens when it runs out of steam?
18
It’s nothing more than a new bubble to explode. Trump has no idea about economics his entry to Wharton was on name
3
Market manipulation form Powell and trump to make their friends richer. The average worker in America is not invested in the markets and the trade war is driving the consumer prices for domestic and imported products higher and these costs are passed down to the consumer.
10
Please do not let us feel we have lost confidence in the Fed Reserve. Trump is slowly destroying our Democracy.
18
He is just caving in to Trump.
12
What a scam! Cutting the fed rate makes cheaper money available for the high end investors to buy stock and speculate in the market.
Meanwhile, the global economic picture is weak and the American side of it is being pumped up by this phone money.
Underneath we are looking at serious weakness. Instead of dealing with them Trump got his "boy" to try and carry him over until 2020.
But as you look around you see malls closing, manufacturing right at the negative mark, exports declining and unemployment numbers boosted by phony accounting and people working two jobs to make up for the one they lost. The auto market is about to tank. Why do you think GM laid off all those workers?
If anyone thinks the Fed is independent from politics they need to think again.
17
The effect of inflation targeting in a globalised world is to inflate the value of financial assets. With a large proportion of merchandise coming from low-wage countries, consumer inflation is guaranteed to stay low and therefore interest rates stay low, and the banks can create financial markets credit without restraint.
Periodic recessions are a necessary hygiene of Capitalism. The longer this expansion goes on, the bigger the recession afterwards. The Federal Reserve should raise the interest rate.
10
Why isn’t the solution to “uncertainty” to stop the trade wars, which are causing slower growth and uncertainty? We’ll need lower interest rates when the economy actually goes into recession.
11
Lower interest rates means lower corporate expense.
Therefore, a welcome move. Combined with much lower tax rates, companies now really do have the wherewithal to hire more employees and to increase their wages and salaries.
4
@Mike Edwards
Why not let interest rates go a little higher and all those funds generated, especially in accounts of retirees, would be spent immediately and would boost the sales of all these companies so they would have the wherewithal to hire more employees and to increase their wages and salaries?
11
@Mike Edwards Oh please! You’re telling us that the tax cuts weren’t enough?
8
@Mike Edwards
They're raking in record profits already. How much more do they need before they start increasing those wages and salaries?
6
"Mr. Powell told lawmakers that “it appears that uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the U.S. economic outlook.”"
It's a bit ironic that President Trump with his trade wars, is potentially creating the conditions that might, down the road, bring on an economic slow-down. Still, my anecdotal observations of prices seem to indicate that the tariffs imposed on China have not yet caused a serious increase in retail prices or galloping inflation or any broad decline in the economy. Last month, 200,000 jobs were added to the economy. So, it would seem premature to lower rates.
Mr. Trump still could eventually be his own worst enemy with his trade wars, but the impact isn't great enough yet to lower interest rates.
2
@T Norris They ARE slowing the global and US economies. 2nd quarter gdp could drop below 2%.
2
The NZ stockmarket usually doesn't take as big a hit as the USA stockmarket when there is a crash. Maybe people with their nest eggs in the USA stockmarkets should think about moving some of their nest eggs into the NZ or some other stockmarket that doesn't crash as badly as Wall Street.
There's an old saying, Don't put all your eggs in one basket.
4
Cheap credit means easy spending and that is what drives our economy. Trump wants to keep the economy looking good while he runs for a second term.
If a little is good, more interest cuts are better!!
They also want us to keep spending so they can keep adding digital zeroes to their balance sheet. They don’t intend to miss out. It’s easy to make money if you’re a bank. You create it (a debt) out of thin air, send joe schlub a bill and presto. Something from nothing.
4
@SM
Yes, while all that consumer debt is driving the country change their diet to one laced with Prozac.
3
Interest rates are presently much too low. We older folks don't want to keep our entire nest egg in the risky stock market. We want to earn more a reasonable interest rate on our CDs. Please Mr. Powell don't lower interest rates in response to Mr. Trump's stupid tariffs. He needs to live with the results of his policies. Don't bail him out.
23
@Semi-retired
Simple truth well said. Me too.
6
Shameless capitulation by Powell. Clearly fearing Trump's wrath. His statement could have been from WH, probably Kudlow.
Stunning how the Fed's mandate has expanded from ensuring full employment and price stability to continuing to pump the equities markets. Nice gift to Trump's reelection bid. Very disturbing.
11
Jerome Powell needs to cool down this economy
8
Disgusting... Nothing for the common man-- everything for Wall Street.
# Why Trump will get re-elected -- good for the market..
6
Now we know the Federal Reserve is totally corrupt, i.e. politicized. Trump wanted a market ticker tape splashed all over CNBC and FOX showing an up tick. In his little brain he thought this would win him the election. “Big is great.”
The Republican party is officially dead.
11
We are already have four, count 'em FOUR, large bubbles going at once - stock market, technology/startup/venture capital, real estate (both commercial and residential) and corporate debt.
The Fed lowering interest rates now will only inflate those bubbles into massive proportions. The next recession could have been a relatively "mild" recession if the Fed didn't panic and lower rates unnecessarily, but now it's a foregone conclusion that it will be another extremely painful one when all of these bubbles burst.
11
Let's be clear, a good looking stock market does not mean money in the middle class's pocket, and as we have seen before, it can be gone in one day. The fact that the stock market has been good for some time hasn't raised the quality of life for most Americans. It isn't even that great for the rich. They like it to plummet now and then so they can swoop in and make a killing by buying low.
6
Is there some reason we should have confidence in the decisions, the reports, the recommendations, the data coming out of any agency touched by the Trump administration?
Honestly. I should put my future, my family's future in the hands of bigots and criminals, self-interested martinets, meek little men enduring months of public calumny and abuse?
It is far, far more likely we're seeing another Libor scandal in the making, only this time its not some easily-jettisoned mid-level loser, its the people running the place.
I don't trust the Fed, I don't trust the markets, I don't trust Treasury and I certainly don't trust Trump. Each one has shown, in the recent past, a proclivity for manipulating the process for personal, financial, or political gain.
Powell shows every sign of caving under a torrent of abuse.
I don't, frankly, trust my own bank now that we know banks steal from their depositors, lie to regulators, create long-running scams administered from the executive office down, and get off with "Oh, OK...we'll try harder".
10
@oogada
You have stated precisely what a lot of people feel. Thanks.
2
Trump lowers taxes on the rich, even thought there was no need to stimulate the economy, and the deficit skyrockets
Trump puts the squeeze on the Fed to lower interest rates again, though the Fed is supposed to function relatively independently from a president's wishes in order to look out for the well being of the economy.
Fed Chairman Powell caves under Trump pressure, although again, the economy does not stimulating; it probably needs cooling down so we don't experience another economic collapse.
Once again, Trump's ego and desire to continue as our inept, narcissistic presidential apprentice trumps reality and common sense.
Quiz for Trump supporters: What could possibly go wrong?
5
I think China has a new strategy for taking over corporations in foreign nations, especially in democracies where freedom of speech is allowed. Both China and Russia have internet restrictions for their citizens.
What someone needs to look at is who is buying up all the corporations inside USA and are they financed with Chinese money from Chinese government bank. This is a very subtle way communist China can overtake nations and their economies, and dictate to your government the laws of a democracy because the Chinese own all the wealth in the nation.
China's new tactic is teaming up with Russia, at this moment in time, as exporting logs to China is our third biggest income earner for NZ, and they're not buying our logs as much and giving all their business to Russia. China in a subtle way, is planning ahead, to overtake Democracies around the world by controlling the economies of Democracies.
Also, Chinese get to buy into your biggest export companies by over lending money to them, when they know big business has overstretched themselves, then buys less of their product. so they can bankrupt the company.
China is foxing the western world by being both the lender and the buyer so they can manipulate the economy and take over your nations businesses.
China doesn't need to go to war as it uses other subtle ways to control western world economies; whoever controls the money and businesses can dictate to the government of that nation what laws they want in that nation.
6
@CK
You've painted a picture that is both scary and true.
I just read about China and Russia getting together on a 1250 mile road called Meridian that will take them into Europe.
And we're sitting around talking about Trump Tweets while being buried by these long term strategies by democracy hating thugs.
5
Rebecca,
I keep a little cash in an envelope stuck in an old Marge Piercy novel on a bookshelf in my apartment. What’s the point of walking it to the bank?
I hear you.
5
The fix is in. Trump will get his rate cut so he can keep the economy juiced up and can win re-election.
2
Fed Chair Powell is padding about on thin ice more and more.
He needs to very seriously ask himself that if our economy spins downward as it did 10+ years ago, huge blame will FOREVER have it's association with his leadership and his elective rate cuts.
Ironically, Trump will be the first to twitter him under the bus and heap the blame on Powell.
Why don't these professionals with competence and a modicum of integrity realize and learn that kowtowing to Trump only tanks their careers and reputations ?
4
@Hannacroix
I'm not sure Powell is a professional or competent in managing an economy.
1
And how much money has Trump and all his rich friends got to loan to people. The only people who will profit when the crash happens are the money lenders that have made sure they have an asset to repossess if a crash happens. The money lenders won't lose but profit from the crash when it happens. Fools rush in...
2
The Chinese government doesn't need to go to war; it just lends money to all the overstretched western world democracies then repossesses all their businesses, homes, economies etc...then when they control all the markets they can dictate to the western world governments what laws they want in place otherwise they'll crash the economy and sack workers and that particular government gets voted out at the next elections. The puppet masters are communist Chinese government.
Someone needs to draw a cartoon showing the puppet master and all the western world government underlings.
1
He'll be out of tricks when the economy starts to falter.
3
This makes me sick. Interest rates are actually too low and have been for quite some time. Powell is clearly being bullied by Trump. One minute Trump is bragging about how well the economy is doing and the next minute he's lamenting the rise in interest rates that have done nothing to slow the economy. The separation of powers just took another hit.
4
It appears now we have Donald J. Trump running the
Fed. I remember not long ago when the Fed was
free from harassment by the 'president' or any other
entity. Another norm bulldozed by the Bulldozer-in-Chief
6
The definition of insanity is doing the same thing over and over again, but expecting different results. ~ Albert Einstein
5
If a Fed is eager to cut interest rates with unemployment at 3.6%, then when will the Fed not cut rates? Will we ever see normal interest rates again?
3
THIS is NOT the time for a rate cut. If you cut rates now there will be nothing to rescue us from the inevitable recession to come. This is manipulation of an already good economy that the Trump administration started with, just like the unsustainable tax cuts, and overly generous as well as dangerous regulatory cuts to finance and environmental rules that goosed the economy but cannot keep it afloft forever. I challenge that Trump manipulated the economy more than he "handled" it, there is no strong underlying structure to support it. But cutting interest rates really hurts the MILLIONS of senior citizens with savings who can't earn hardly any interest at all. The stock market needs to operate on real investment rather than fast trades and hedges and cheap borrowing. DON'T give in to Wall Street.
9
Whatever happens tomorrow we need to be prepared for the radioactive fallout of perpetual QE. It appears that our economy will become too dependent on QE and that our politics will naturally follow suit.
When the next recession happens what force will we have to fight it? Americans will be harmed in the making of this re-election campaign.
The Trade War should not factor into the decisions, by letting it factor the Fed is supporting it and bowing to political pressure.
3
1 'hint' and the stock market soars. Looks a lot like a manipulation. Just sayin'.
11
Hmmm. Trump threatens, and rates get cut even though unemployment remains at historic lows, the economy keeps increasing jobs, and the stock market is flying high. So much for independence from political influence.
7
Interest rates are already historically low and after 10 years of so-called economic expansion we've done nothing to slow the rapid growth of the national debt because of the obsession with wars and subsidizing the wealthiest. So if interest rates are lowered further just to keep the stock market booming for the investor class today, what monetary policies are going to be available to ameliorate the effects of the next recession? Or are we just going to keep this subsidized growth of the stock market rolling forever with more and more rate cuts, even though rates are near zero? It will literally be mathematically impossible to cut rates further (unless the government starts paying banks interest to take government money and loan it to students at 8%). There, of course, will be money for bank bailouts, but economic stimulus that benefits the rest of us will be off the table because the debt is too high.
16
At some point the working class will have to choose to either keep subsidizing wallstreet and their corporate bosses' life style choices or take the hard shock to the system that a completely transformative workplace democracy movement requires.
We need to be preparing sustainability on the local level because, as the Conservatively Appointed Justices of the Supreme Court have hinted, they doubt there is any power in the Federal level over, or for, States.
3
As a stock holder, you've just given me the go ahead to sell stock at a high, so next year when everything falls apart, I can buy low.
Toto, I have a feeling we're not in Kansas anymore.
15
This administration trumpets the dichotomy of extolling the strength of the economy and baying for a lower fed rate because it is necessary to sustain the economy. In short, a wise, but cautious interpreter of our government's statements (issuing from Trump and his minions) should conclude that economic pronouncements, at all levels, are propaganda designed to facilitate a coup overcoming the usual checks and balances that are supposed to protect our national government.
The same applies (not surprisingly) to the rationale being played out regarding a citizenship question on the census. As announced by Leader Trump, the real reason for a citizenship question is to manipulate our political system to further The Leader's control of government.
Until now, I never feared the overthrow of our democracy. However, it may not be out of the realm of possibility.
Achingly, if it happens, it will be with the willing approbation and assistance of a sizable minority of the people, aided and abetted by the unthinking tacit support of another very sizable minority.
Fake economic reports and self-serving rationales for manipulating the census may precede a coup. Ready the ramparts.
5
They are treading water and hoping against hope that the Trump slum can be avoided until after 2020. The Republicans win either way, if the slump comes before the election and they lose, then the recession/depression will come in 2021-22 and they will blame it all on the Democrats. There are no words -----------------
7
Seems really similar to Obama's term. Its almost as if its designed to destroy any appetite for socio-economic reforms when the pendulum of power actually switches.
I do not think there are any words that exist to describe the level of bad action economic conservatism has had on our American Experiment. Even when we compromise towards a market solution for health care, they destroy it the moment they get power.
This house is divided and I don't think it will stand much longer.
2
Why is the Fed even considering interest rate cuts when we are at full employment and the federal government is running nearly $1 trillion stimulus on top of it?
One striking thing about the Fed's latest interest rate forecast:
March forecast for 2020: 2.6%
June forecast for 2020: 2.1%
June forecast for 2021: 2.4%
A nice help for Trump, reversing after the election. Why are they helping this guy?
14
@David Doney
Oh, that's easy. They don't want to lose their jobs.
Ask us a hard question.
3
This is a Wall Street dream come true. The more the stock market fluctuates the more big investors and brokers make. Of course, this is a Russian Roulette market.
To assume the market is so much stronger than it was in 2016 ignores logic. What is keeping this afloat are the Trump tax cuts that in turn are building our deficit to astronomical heights and mostly benefiting the wealthy and corporations.
A bill is coming due and it will not be a pretty thing to see.
23
@Barney Feinberg
But Trump won't be up for re-election then so it doesn't matter.
1
That bill is exactly what they want to be able to argue for a complete and total mandatory privatization of our social programs. Cut taxes to make government ineffective and costly, then provide exploitative market solutions that have little or no constitutional protections from abuse.
Cut to a few years later and we've got fiefdoms again.
1
@Tyler I would rather think that the benefit of the country will win the 2020 election. Do not underestimate the power of the press to set the record straight or unincumbered foreign allies to share the damaging truth about Trump and republican illegal acts.
3
These gains are hardly "soaring"- they're piddling. One might have thought that the magic words of the Fed chairman would spark much bigger gains. My guess is that investors have had enough. They don't trust the supposed strength of the economy under Trump- with his compulsiveness replacing strategy, his attacks replacing policy, his total ignorance & reliance of hacks as economic advisers, his trade wars which have no logic & no goals & which are harmful to our own economy; & with the global economy growing ever darker.
13
@Fred
It may also just be plain old exhaustion. How many rounds of "will he, won't he?" have we been playing lately?
Will he slap tariffs on Mexico? Tune in in 45 days to find out!
Will he increase tariffs on China? Check Twitter for the latest!
1
Does anybody think Trump knew that by pursuing fiscal policy that was contraindicated he could force Powell and the Fed into monetary policy that is also contraindicated? Is that the 10-dimension chess we sometimes hear Trump is the master of?
2
Instead of focusing on how much the S&P has risen in the last month or quarter, it is worth noting that it is up just over 4% from January of 2018. If you drive the market down enough through tariffs, threats of war and other things that induce uncertainty, you might eventually get short-run rebounds that look impressive in isolation but distort the longer-run picture.
14
The only prism through which rate cuts make sense is that they serve Trump's reelection effort. They are entirely unwarranted given the Feds twin mandates and current, cyclically low unemployment and inflation rates. Trump is using the contrived uncertainty caused by his tariffs and threats around the vacancies of two fed gov seats to cajole the FOMC into cuts. Trump has seen two-bit, politicians in the third world crank up the presses and hand out free money to successfully advance of their reelection efforts and he is using same playbook. Watch how after the Fed has capitulated, Trump will announce a miraculous historic trade agreement with China right before Xmas that provides relief to soybean and corn growers and rallies market at year end. Meanwhile, 5000 U.S. banks will lose $10s of billions in income but who cares, everyone hates the banks. The cuts also help spike the value of Trump properties by several billion but that is sideshow. Trump cannot afford to lose the election.
15
If the economy is doing well, why cut rates? Cut them when the economy is not doing well. Cutting rates now will not give us room to stimulate the economy with further rate cuts during a downturn. It appears that we are going at this the wrong way-why?
7
I have no idea why the interest rates need to be cut when the economy is doing so well. The reality is that when the next crash happens and the rates are so low, the economy will really be in big trouble then. Only the truly wealthy will be able to weather the oncoming storm.
This up and down with the stock market is just a house of cards built on quicksand and the only winners are the .01% who can ride the waves to more riches.
15
Markets move on today's news, so perhaps I should not be affected by word that markets are up on Mr. Powell's statements. But there are numerous signs that the long bull market is very hear its end, and these reactions seem like whistling past the graveyard. Perhaps more seriously, the current run-up in stock prices means that the fall will be even harder when it comes in the next few months to a year.
1
They've cut interest rates in NZ, as well. I see a repeat of 2008 about to happen. People borrowing too much then the crash. It's like a Ponzi scheme that eventually comes crashing down.
9
This bubble will burst soon and it will be ugly this time.
Much worse than 2008.
16
Trump's never had a printing press before. Expect QE4 before November 2020. He wants a lower dollar, he'll get it, and some.
4
Lower rates mean higher stock values.Just because most Americans don't own stock is meaningless, Trump marches on. The stock market will always go up as we have learned.
True, there may be problems for those who save and depend on interest but so what.the important thing is that stocks go up . The fact that the deficit is growing more rapidly both in fact and in proportion than ever in our history (aside from WW2) is meaningless. After all who needs government as long as we have bombs and a military-industrial complex to make sure they're ready to go on trump's whims/tweets/orders?
Me.
4
Not many people can say the went into debt after being handed almost a half a billion dollars with no strings attached. Then continue to lose money by way of the few tax returns available
to the public.
Trump knows the best way to make money is to cheat the IRS and make sure the lower and middle class foot the bill.
Now we even pay for Trump's lawyers while he is POTUS.
13
The rationale is to “support inflation”. You do want your dollar to be worth 98 cents next year, don’t you?
6
Even Krugman supports some inflation.
1
Wages aren't behaving as economists expect because economists think about wages the wrong way. They think everything is elastic and linear and that a shortage will cause wages to rise (supply vs demand). But that assumes that skilled machinists, nurses, and engineers are sitting at home not working because wages aren't high enough, and that they will come out if wages rise. Why aren't wages rising then? Because there simply aren't a lot of machinists, nurses and engineers sitting at home. They are all working already. Raising wages will not create more of them. That is, demand will not create supply. All rising wages will do is induce some of them to change jobs. But that is often inconvenient or very costly. There might be a lot of potential jobs in Seattle but houses cost so much that people won't move there. Converting a high school dropout, coal miner, or (horrors!) immigrant into a machinist takes several years, by which time the already old expansion might be over.
4
And any gains after the credit expansion contracts will be lost in wages and lives buried in catastrophic economic failure for workers.
1
Bubble
5
@Jim This.
I'll wait patiently for the great minds of the NYT comment section to tell me why this is horrible news, how Trump is responsible for the economy's lows only and Obama is responsible for the highs, and why he'll be impeached any day now.
2
stupid. the mortgage market will become saturated with loans... buying has slowed significantly already, like it started in 2004...people wont be able to pay back, they will walk away and hello 2007 rates will be forced to rise and here we go with an out of control debt
3
Ask not for whom the bell tolls
3
Is this really what Trump wanted - lower interest rates, but the reason for it is his incompetence and mismanagement?
2
No matter what, the election of Donald Clueless Aggressive Trump, has hurt our country. His election has hurt our relationship with our allies who think we've lost our minds. How this comes to an end more than worries me.
6
Look at a graph of the S & P in the last five years, and compare it to the run up to the dot com and housing bubble crashes in 2000,2008. See anything familiar?
13
OH GREAT...JUST DANDY!!!
Well Mr. Powell, please just keep on "suggesting" and "hinting at". If you don't, you usher in two things:
(1) sending the country on a short-term financial roller coaster ride on which the end will be darker than it was in the beginning,...
-and-
(2) allowing our Bloviator in Chief a political victory that will give him political cover for a smirking claim he strong-armed you into the posture and worse have him taking credit for the even-shorter-term moonshot you created.
He'll be back for more, and more, as the 2020 voting approaches....you watch!
Bad move if you do capitulate Mr. Powell, a MOST bad move and worse on multiple counts!
9
The trade tensions are caused by Trump. It is not an underlying economic problem and should not be addressed by cutting rates. The underlying economy is strong. Why reward the President for his bad policies?
9
Why cut rates if the economy is doing so well? How about Trump start paying down our country's debt instead of considerably adding to it on the daily!?
238
@Independent American do you realize the derivative of debt has actually slowed down, which, considering an enormous debt created by previous powerless administration, is encouraging to the US economy.
1
@Independent American
Paying down the debt would benefit country...where's the benefit for him in that? Silly American!
43
@Independent American,the only real reason he has supporters are because of tax cuts and Supreme court appointments. You can cut taxes and expect the debt to go down, so... .
13
Fed policy is now determined by bullying by Trump.
It’s all about what helps Trump and his friends.
Why can’t anyone stand up to him??
249
@Grove It's all about average Americans as well, only financially inept people complain
5
@Jo:
Everyone who struggles is "financially inept"?
Your data?
17
@Jo
So Trump is financially inept then based on your comment. Which goes back to the original posters question. Why should an inept person leverage interest rates into a hot economy. Last I checked our interest rates are based on our market, not the global.
10
The lede reads "Fed Chair Signals Openness to Rate Cut, Sending Stocks Soaring."
Isn't this a rather large overstatement? The S&P 500 is currently up 0.46%. However the average daily change (in absolute value) of that index over the last 50 days is 0.92% (see https://seekingalpha.com/article/4159065-s-and-p-500-average-daily-change-ticking-towards-1-percent). That is, the change in price is only half of the average daily change. Even at its peak the S&P only rose by 0.76%, again less than the daily average. I suspect few readers would call this "soaring."
3
Is it licit to doubt Mr. Powell's Fed independence from the constant harrassment of the Executive, when suggesting he might lower the interest rate...with no clear- cut reasoning behind? This, just to be in good terms with a brutus ignoramus unwilling to recognize the healthy separation of powers?
4
These guys are not satisfied stealing from the older generations who are only now beginning to see a return on their savings, they want it all. They should all be removed from office and banned from serving ever again.
9
And Powell just told congress that he will not resign even if told to by Trump. Maybe he should.
3
Imagine this! Trouble in paradise! When the GOP finally kills the Obama recovery the elite will retreat to their world mansions and bunkers, says Chris Hedges. Between paying for the tariffs and paying for the tax breaks to the elite, the Trump cult could awaken from their trance. And then its' time for the owners of the GOP to run and hide!
6
Seems like many here would prefer the economy tank just to get rid of Trump. Sounds like a depressing way to walk through life.
1
@Shay or there are long term consequences to keeping interest rates low during times of economic expansion? Seems that trump and people like you are the ones who want to buck economic academia consensus
6
@Shay
I don't understand this argument.
Having legitimate fears about a looming recession and/or bubble bursting is not "preferring the economy tank" just because someone thinks it's Trump's fault.
I want to maintain the lifestyle I have now, or maybe improve it. I want to go back to school, have more money to help my friends and their causes, maybe actually start saving for retirement. I don't WANT the economy to tank. I've already been through that and I'm still recovering. But I'm seeing a lot of the same things I saw before the last recession, and I don't want things like this *gestures to article* to make it more likely it will happen.
Really?
And how much room do we think the Fed has to lower interest rates when the fan begins to splatter?
3
Trump wants the fed to cut rates so that the economy looks good. I know this will be shocking, but the economy is not as good as the GOP trumpets. The average voter doesn't know any different and that is what the GOP is betting on. When will the electorate stop letting politicians fool it? Probably never.
5
The fact that Powell has caved under pressure from Trump means the complete politicization of the FED. Trump wants to push markets upwards. In his mediocre brain, he believes that splashing a ticker tape win across CNBC will give him the election.
5
Reminds me of the joke “How do you know a lawyer is lying?” The last three Fed chairs have promised to act on the “data” and basically ignored same in favor of bolstering the stock market with a “put”. I’m not sure Powell really understands much beyond the fact that the “excess reserves” created ten years ago allow him to use low-rate ammunition through Trump’s re-election. If the economy actually does cool off, it is unlikely the Fed will be able to boost it. (Low rates are already THE rates.)
4
Stocks aren’t soaring.
2
In reality our economy is based on a bunch of smoke and mirrors and eventually a deep recession is going to happen and millions and millions of hard working Americans will be the ones that are hit hard the most.
It's true that we are in the tenth year of a recovery. The President who was in office for seven of those ten years helped save our country from entering a Depression, saved the U.S. automobile industry from a total collapse, extended healthcare to thirty million Americans who never had it before, and took active measures to address climate change. The person who deserves the most credit is Barack Obama, not Trump.
Trump detests Obama and has been working to destroy his legacy. Environmental rules and regulations have been overturned, climate change is looked upon as fake news, unions are being weakened all across America, health and safety laws are being trashed, and the Affordable Health Care Act has been severely weakened.
I could not care less what today's or tomorrow's stock market will be. I am concerned about the quality of our air and the water we drink, suppressing the voting rights of minorities, millions of Americans losing their health insurance, a woman's right to choose in jeopardy, our constitution in tatters, and civil discourse attacked and divisiveness encouraged every day by the current White House occupant.
I'm concerned about the 98% of Americans who have not benefited from the tax cut the top 2% received. That's is what matters most.
12
Lowering interest rates will simply be another way to artificially goose the economy in anticipation of the 2020 election.
2
Since this is exactly what Trump wants to please a base, one has to wonder, how firm is the Chair against direct/indirect requests from the White House?
5
Sometimes, I think that the stock markets are home to bored souls who just react to things to escape their lethargy. Nobody has any reason to expect that low interest rates can stimulate this economy.
1
Is this the same Federal Reserve that Trump criticized for raising interest rates?
5
This is worrisome. Traditionally the value of an asset is determined mainly by the expected cashflow and the discount rate. The expected aggregate cashflow is not good, as the labor force is aging and global demand is slowing.
That leaves the discount rate and investors' hope is that a lower Fed Funds rate can lower the discount rate. That might be a false hope, since the yield curve has already inverted, meaning the long-term discount rate is already lower than the 2.5% Fed Funds rate.
Also the flip side of the discount rate is that it's the same rate the economy is expected to grow. A lower discount rate is good for stock valuation now, but comes at the cost of a less prosperous future.
We're not quite as bad as eating seed corn, but we're inching closer.
11
I've said it before and I'll say it again, there as never been a Fed Chairman more intimidated by a President than Powell is by Trump.
Reductions in short term interest rates from current levels will have little effect on offsetting the economic disruptions caused by tariffs.
27
@CC Agreed.
1
Completely irresponsible to cut interest rates at this time.
26
My AM radio has been in a near-continuous Trumpgasm for several months over the great economic gains since Trumplethinskin took office. Now the Fed is considering a rate reduction in response to market weakness?
Sounds like someone has been exaggerating their 'success' or the conservative concept of free market capitalism is a myth... It has been said nothing in politics happens by accident, can the same be said of the financial sector?
Pay no attention to the men behind the curtain.
Trump is good for tax cuts and federal contractors, what more do you need to know? MAGA.
20
How much will the Stock Market soar, when Trump's Market Manipulation starts failing?
Anybody remember September 2008?
It's only a matter of time before Trump's House of Cards collapses.
Jerome Powell will be complicit in the collapse.
44
@John Doe The coming collapse will be worldwide, the whole thing is built on fraud and deception and the masses are waking up to it.
2
Nice try. Obama did not take office until 2009, well after the precipitous drop in the economy.
7
@Matt
Took place under Obama? Are you refering to the lack of criminal prosecution? If so then I am onboard with you on that one. The GOP/Bush/Cheney and Co caused, or allowed to happen, the big Recession. Then the Obama administration failed to hold anyone, government or business, accountable. They did a fair job, against very strong GOP headwind, of stopping the economic freefall and getting it growing again but forgot(?) to punish those who crashed it in the first place.
Sound about right to you?
3
Judging from some comments,there are better ways than high interest cards.Unless your credit is bad ,and then you need to correct it,select balances you can pay off with zero interest balance transfers.If you're getting up there ,shut yourself down.Home equities are easy right now and you do not have to use the whole thing,which is a huge mistake many borrowers use.If you have a decent vehicle ,pay it off and coast for a few years.
6
@Alan Einstoss
Excellent advise.
Trump's economy has raised my net worth over or around 50%. Incredible.
4
@Scott - I'll bite. How exactly did he do this?
I'm just curious..... Will that money buy you cleaner air or water or better infrastructure? If insurance companies are able to start canceling coverage because of pre-existing conditions will you be able to pay a six figure hospital bill in the even of an accident or illness?
21
@Scott
Careful Scott, it could all come tumbling down. I'm getting out of the stock market this week because there are so many instabilities in the U.S. and around the world.
21
@DR On paper. just a guess! haha. Try locking in those profits - they *might* come in handy soon.
3
If the economy is magnificent, why isn’t the deficit going down?
50
@sebastian
The traditional GOP sales pitch is that deficits are bad unless the economy is struggling. Then they're acceptable if the money is paid back after the economy rebounds.
Unless someone needs a tax cut to expand their ~40% voter base, then the deficit is 'expedient'.
It should be noted the last two presidents who delivered a balanced fiscal year were conservative icons Lyndon Baines Johnson and William Jefferson Clinton. Isn't that how it works? Balance a budget and the neo-cons love ya' for it...
In the case of Clinton, there was a surplus for 1999 and 2000 which Rehab Rush Limbaugh bitterly opposed because that meant the IRS collected more in taxes than the gov'mint needed.
The nerve.
Instead of giving the taxpayers a refund, Clinton applied the 2000 surplus to the national debt. No wonder we couldn't risk electing Algore in 2000!
5
Entitlement reform would be a good place to start.
1
@sebastian Tax cut?
1
My grandfather saw the dirty bathwater coming and got out of the stock market before the fall then lived pretty well for the next three decades.
Will the next tumble arrive before or after the election? I know that Trump will do anything he can to stay in office since he fears the consequences of losing control over the narrative as well as losing face/going to jail/being exposed.
If you think you can ride it out or jump just before the iceberg, think about the speeds at which computers trade stocks.
Of course, I could be wrong....
18
It is better to slow the rate of increases than to cut. We need to build enough into the prime rate to give us some leverage to make significant cuts when we really need them later.
Signaling weakness now isn't going to be good for the systemic health of the global economy or markets.
The best remedy for growth is policy that takes everything into account, including the need to have rates that are sustainable over the longer run. Where we are now is great place to level off, but not drop.
Please do not signal weakness. We don't need that going into the computer models at this point.
63
@Tom Paine
Most economists, me and maybe you acknowledge that the quarter point increase in December was a mistake.
Do you know who else called it a mistake - at that time - the Trumpster - listen I think he is a buffoon but he was right at that time.
This 'proposed' and 'maybe' cut this month will simply undo that raise
3
@Tom Paine
Who is ' we' ?
As long as Trump can hide his income tax returns and business accounting financial records from the American people we Americans can't tell where Trump Mar-a-Lago ends and Trump White House begins.
5
@Tom Paine
Maybe we are in crisis already, and the talking heads who profit from throwing our money into their black hole investments funds, etc, are actually not telling the truth?
2
$ for the very rich, in the good US of A, is so easily obtained, why do the very rich, need a rate cut on the interest on their loans, that they got so cheaply, before this newly promoted extra low interest loans that the Chump administration wants, so the bankruptcy King/ U.S. President can get more forgiveness, on all his previous defaulted loans, that we poor Americans are paying for now?
17
Not being an economist, I cannot pretend to have a deep theoretical understanding of the interrelationships among the many variables involved in juggling interest rates, the effects on investment, wages, inflation, etc. However, what is happening now seems more like the subverting of the national interest to the whims of one poorly-educated egotist. The logic of cutting already very low rates will of course make it extremely difficult to earn interest on savings. The result seems to be that the stock market may be the only likely potential source of accruing any wealth, unless one is already wealthy. Yet, if everyone throws money into stocks, the values cannot continue to increase forever. Not everyone is a large stock holder. But as long as Trump sees stock market indices as the sole indicator of economic success, we are apparently destined to watch as he pursues his pet pursuits. Oddly, he still calls himself a Republican and his camp followers apparently agree.
156
@aoxomoxoa
Thank you for more eloquently putting what I was thinking.
When I read the article, the only thing I could think is: This is a bubble, and it's about to pop.
64
@aoxomoxoa
Since economics is not a science and economists are not scientists you are qualified to render your judgment and opinion this Trumpian scam/scheme.
There are too many variables and unknowns to craft the double-blind experimental controlled tests that provide predictable and repeatable results that are the essence of science.
Economics is gender, color aka race, ethnicity, national origin, faith, sociology, education, history and politics plus arithmetic.
There is no Nobel Prize in Economics Science there is the Swedish National Bank Prize in memory of Alfred Nobel.
3
When the market takes its dive (and it will) we may all be asking "What's become of the baby?"
7
Since when does the Fed adjust interest rates to accommodate a president who insists on engaging in trade wars.Trump wants lower interest rates to “juice” the stock market before the 2020 elections. If he thinks that the Fed will lower interest rates because of trade wars he will prolong them and initiate even more drastic tariffs.It seems that Mr.Powell has heard the Trump pleas for lower interest rates and is acting accordingly-that has not happened with Fed chair men or women for years.Interest rates are already low-lowering them more gives the Fed very little room for future action when there is a financial crisis.
305
@JANET MICHAEL
Trump is trying to distract Americans attention away from the Mueller Report and Mueller's looming testimony before the House Judiciary Committee.
The basic ethical professional obligation of the legal profession is to avoid even the appearance of impropriety.
What is the basic professional ethical obligation of the banking accounting financial profession?
8
@JANET MICHAEL, though I agree with your assessment of Trump's manipulative intentions, I don't think Powell is capitulating to Trump. He's simply acknowledging that the inane trade war is starting to have detrimental effects on the broader markets, which will eventually cause harm to the domestic economy if not resolved. Powell's been doing an excellent job of trying to sustain an actual economic expansion while being endlessly harangued by Trump to cut rates for the wrong reasons. It's a very tough balancing act for which Powell deserves respect.
78
@JANET MICHAEL
Thank you for saying exactly what I was thinking.
Yes, why should the Fed take "corrective" action to possibly counter ripple effects from a President's self-imposed trade war?
I don't believe Janet Yellen would have ever made this move in the face of a month of strong jobs.
It's long past time to push that rate up.
13
Let's just set interest rates at -383% forever. A permanent handout to the poor struggling finance/insurance/real estate sector. Boy, isn't it impressive how these hard-nosed bootstrap-pullers managed to create a decade-long bull market using the public's money in its quadrillions? Literally: quadrillions? Thanks, Fed, Treasury!
Oh, by the way: there's no money for college. No money for healthcare. No money for a Green New Deal that might, like, save the species. No money for any of the Great Unwashed losers in any way, shape, or form.
You know who's stealing from you? Honduran refugees.
Oh, and in addition to the permanent -383%, make sure the rich have an entirely different justice system for their crimes, too. Jeffrey Epstein, the Catholic Church--who cares? It's just a little bit of child raping; I don't see why you'd want to hurt the poor precious weak little rich people and massively powerful institutions.
Be fair. Don't you be some class-warfare-instigating destabilizer, now!
Give them everything you can, even though that will destroy civilization, and in the not-too-distant future.
It's the only way to help the job creators innovate.
96
@Doug Tarnopol
I feel like this all the time. You want to say things sarcastically, but they're not even sarcastic, just basically starting the truth.
5
@Doug Tarnopol
Looove iiitt! Too bad the average voter is blind and deaf.
3
Trump must have balloon notes coming due. The man lives on debt. Of course, he wants lower rates.
23
Corrected title: Powell pledges fealty to Trump.
10
In other words, the Federal Reserve is now under Trump’s thumb. It’s remarkable how quickly the United States of America turned itself into a banana republic.
196
@Walter Bruckner
Alas, you're right. Once in a while Mr. Trump will stumble into the truth, but only if its aligned with his self-aggrandizement, or his master plan of re-election, which tend to overlap. Still, the economy is very strong. While I'm no economist, I'm puzzled why interest rates should be lowered when, last month, we added over 200,000 new jobs. It makes about as much sense as Mr. Trump's tax cuts. We don't have much wiggle room in fiscal or monetary policy if we find we're running into a real recession. I remember the stagflation of forty or so years ago. Around that time we had oil price shocks. None of that at the moment. It would seem best to let interest rates well enough alone.
5
@Walter Bruckner
No it's not. Fed decides it's actions based on data, not Trump.
1
@mark The data in other years would have caused them to raise rates because of worries of inflation.Lowering rates now will result in runaway inflation and a stock market bubble as people flee low interest money markets and go to stocks.
3
Question is: Is this right thing to do, or is he just bowing to Trump. Only our investment accounts will know for sure.
4
I am getting very tired of these financial games played by high level people. The massive swings in the exchanges, caused by quotes from the Fed Chief, or trump, or anyone with a platform, exclusively benefit the rich. How are these absurd "will he - won't he" stories and quotes from government officials etc not akin to outright manipulation?
The Fed and all government officials should be barred from all public pronouncements about interest rates.
21
Everyone, and I mean everyone, with money to invest is already all-in on the stock market. There's no other place to make money, and there hasn't been for over 10 years. You know what happens when the inevitable (massive) crash occurs? How much more money is the Fed going to rob from conservative savers to pay risk takers? They already gave homeowners and banks trillions of our money to bail them out. It never ends.
18
There is another way to make money. You provide a good or service that people want or need. Perhaps if more Americans were interested in actually adding value, instead of what my wise, old grandfather called, “Bourse spielen,” we would be in a much better place.
4
@Character Counts
When the crash occurs, most rational investors will not panic. They will hold and not sell at a loss. And, they will continue buying. Then, when the market recovers, as it always does, they will be just fine.
Massive crashes have happened many times over the years, and the most basic investment strategy accounts for that. It's not hard. Even retirees should not have a problem, if they have probably planned.
Speculators, poor planners, and emotional investors will suffer.
If they entire financial system collapses, then that's a different story; but, then we'll all have bigger things to worry about.
The beauty of the stock market is that anyone can buy stocks. I'm a low middle class guy who has lived below his means and bought stocks for years using the most basic strategy. It's not hard.
2
@Walter Bruckner
"Perhaps if more Americans were interested in actually adding value"
And by "Americans", I really hope you mean businesses. Because the average American already puts in way more "value" than they get out. Adjusted for inflation, the minimum wage is well under where it should be. Real incomes have stagnated or gone down. But the gulf between rich and poor continues to widen.
10
A rate cut? Really? Stock market hitting new highs, so let's juice the bubble some more, says Trump. What about this "great economy" everyone is talking about. Like moving from essentially 0% down a quarter is going to do anything other than make Wall Street and Trump happy?
14
One has to wonder how much Trump and his mob have made off manipulating the market.
1
As a senior citizen I would like to have some income from CDs that aren’t as volatile as the stock market. This adds a lot of risks for those on fixed incomes, especially if we have no pensions and must rely on our 401Ks. When the market crashes many seniors will be hurt badly and this as healthcare costs are so high even on Medicare. Bad policy just so trump can be re-elected and wreck the economy and environment more for his enrichment and ego.
26
I believe Mr. Powell is a man of tremendous personal integrity. He is under enormous pressure from President Trump to do his bidding. I personally hope there will be no interest rate cut this month. The "clouds on the horizon" described here may move away. Trump may see continued tariff wars as his tool to manipulate the Fed if rates are cut now. The uncertainties created by tariffs, threats of more tariffs, and no idea if or when international deals may be reached are a real barrier to continued economic growth. Trump signaled to Mexico and the world that he's willing to use tariff threats to further his own agenda.
While the stock market and the most recent jobs report are strong, why cut interest rates now? With clouds that may become storms and much talk of an economic expansion that's lasted longer than usual, why not apply interest rate cuts when and if they're warranted?
10
Mr. Powell would do well to follow the long established practice of his predecessors by saying little, and by silently carrying the “big stick” of the Fed.
He should, however, at this juncture, publicly state that Presidential interference is unwise, unwelcome, and inappropriate. The President’s involvement in his many bankruptcies attest to his lack of fiscal acumen and financial restraint, and this President’s autocratic bent can only be stifled by resolute strength.
With interest rates at historically low levels, a growing aging population desirous and in need of safe reasonable returns, and the decade long climb to even the present low rate, a backslide to accommodate the short-sighted nature of a self-serving President would be simply wrong.
Trump’s policies are more determinative of the nation’s fiscal future than the Fed rate, therefore Fed policy should not be used to ameliorate unwise policies. The interest rate setting of the Fed is its most potent weapon and should be held in abeyance for actual emergencies and not used for political expediency.
22
another person loses their spine and cowers to Trump. Typically when the economy is doing well, interest rates are raised to pump the brakes and when in recession, interest rates are cut to stimulate the economy. He is painting himself into a corner for the next recession.
30
@Greg Jones Not to mention that when the economy is doing well is the time to curb, not increase, deficit spending. Between these two, the chances of an economic disaster are increasing.
20
The rich keep getting richer and the poor keep getting poorer.
It used to be that if you put your money in a saving account, it would double in about 7 years. Now you're lucky if your money still has the same purchasing power.
It's no wonder nobody bothers to save anymore.
31
@Jack Edwards
Not to mention the effect it has on pensions.
18
@Jack Edwards
There's no point in putting money in savings anymore. You get pennies. What's the point? That money will lose more value due to inflation than it will gain from interest.
9
@Jack Edwards
There was a time when banks *needed* depositors and would compete for saver dollars.
Today they stick out their hands and get their money from the Fed for practically free.
Savers have been thrown under the bus.
22
The greatest dangers to people hoping to set aside some money for their futures -- here as well as in Venezuela -- are public debt and inflation.
Allowed to do want he wants to do, Trump will print and spend enough money to make Venezuela look like a responsible country.
https://www.reuters.com/article/us-venezuela-economy/venezuela-inflation-falls-below-1-million-percent-in-may-for-first-time-since-2018-congress-idUSKCN1TB2GP
https://mashable.com/2016/07/27/german-hyperinflation/#HKo6ZIB1Tsqy
7
Do I hear echoes of "irrational exuberance" again? As for "the law" protecting Fed Chair Powell's position, trump hasn't avoided breaking the law time and time again such as with his personal profiteering by breaking the emoluments clause of our Constitution.
13
The bully wins again.
14
We are all Trump Chumps now.
9
Jerome Powell received Donald Trump's threatening and scolding message to raise interest rates or else.
Donald Trump is the American Medusa. Every institution and person upon whom he gazes is instantly corrupted and turned to stone.
6
@Blackmamba
That is exactly the opposite of what is happening and what is likely to happen.
@Blackmamba
You must mean *lower* interest rates.
Powell will go down in Fed history. Down down down.
11
The Federal Reserve Policy for the last two decades has been to fight the collapse of one bubble, created with low interest rates, with an other bubble. Thus, the collapse of the dot.com bubble was replaced with the housing bubble, the collapsed housing bubble with an asset bubble.
Capitalism is based on the assumption that capital is a priced resource, handed out in a competitive market place to those most able to use it.
When capital is free, as it is now (10 year T bill is 2.05% The inflation rate in 2018 was 2.44%. ) it will be misused
Worse, it loads the price of current exuberance onto the next generation. Social Security , by law, must invest in Treasury bills. Under the negative real interest rates set by the Federal Reserver, the 30 year olds now paying SS taxes, pay into a money losing fund.
22
So; when the recession hits; what can we do? Dive into a hole in the ground? Interest rates are already low; Fed will have nothing left to fight off the recession when it hits. Europe is already getting ready. Only a matter of time. Not if; When?
27
Just curious. What happens when the next recession hits and interest rates are already so low? We have the Second Great Recession. And then all the plutocrats swoop in and buy the homes and equities that had been foreclosed or sold to cover margins. The rest of us? We get the good news that coal is back! It is e entirely predictable. Pickety and Marx has it right. Our country began its long downward spiral under Reagan. Only a Second New Deal can rescue us.
55
@Richard interesting that you didn't mention the Republicans at all. As a reminder of history the latest tax breaks were architected by the current ilk in that party. Let's place blame equally to parties that deserve it.
3
@Barney Rubble
you ask what happens when the next recession hits? Easy, blame the democrats and "socialists" and hand out some money to the wealthy and to the big corporations in this country who have bought and paid for our government. Socialism for the rich, rugged individualism for the poor.
21
@Barney Rubble Just remember that the First New Deal was fought tooth and claw by the business class way back then. Even during the teeth of the Great Depression. FDR had a heck of a time getting some of his NRA legislation passed. Republicans have been trying to overturn much of the New Deal since forever. Imagine how bad the next downturn (Great Depression II) would have to be before they would capitulate. I hope I don't see it in my lifetime.
This has been an economic expansion for the richest as usual. The rest of us have gotten next to no benefits because of how Congress works and who our presidents listen to. Wall Street has benefitted immensely from all of this. The rest of America, not so much.
It's more than about time for our government to pay attention to the needs of the 99%. What do we need?
1. Decent jobs with decent wages.
2. Workplace protections with teeth in them so that employers cannot abuse us.
3. An end to sex and age discrimination. Does any one in our government (which is now headed by an official senior citizen and being obstructed by another one) have any idea how many people in their 50s and 60s cannot find jobs?
4. A lowering of the retirement age since so many companies don't want to hire or pay or keep anyone with more than 20 years experience on the job.
5. A more honest measuring of inflation, the number of unemployed people, and the true cost of living.
6. Universal medical care instead of our wealth care system which is entirely inadequate to meet our needs when we're truly ill, injured, or in need of more than just a physical exam.
39
@hen3ry AMEN TO THAT!!!
2
@hen3ry You forgot one. Eliminate the Social Security Cap.
4
@hen3ry
7. A world-class preschool, primary, and secondary educational system, on par with European models, that seeks to maximize every single child's potential so that this country's citizenry is highly educated across the board. And higher education that is solely merit based and is committed to educating students without saddling them with unconscionable levels of debt.
4
Bernie Sanders asked the question in his closing debate remarks: "how come nothing really changes?"
Senator Sanders answer was "Nothing will change unless we have the guts to take on Wall Street, the insurance industry, the pharmaceutical industry, the military industrial industrial complex and the fossil fuel industry."
Powell's total capitulation to Trump's re-election campaign and Wall Street bankers clearly exemplifies Senator Sanders concise explanation of the core problem plaguing our democracy.
74
@James
I watched Bernie Sanders last night being interviewed by Rachel Maddox. His prescriptions for change are simply the only correctives I see. He is right when he says only “we, the people”, with the tone set by someone such as him as president, can make the critical changes so urgently needed. Average donations to his campaign are $19.
1
The King-of-Debt-Trump gets his wish with rates being cut just as he threatened to fire Powell. Interesting.
44
It's always been thought that the Fed is an independent entity that cannot be bulldozed into changing its policies by an individual, even the president. We are just in the midst of seeing how Trump bulldozed the DOJ and FBI into representing him on conspiracy and obstruction of justice.
Therefore, do we still have a democracy or is it now a plutocracy when the president seems to have an honorary seat on the Fed board?
57
To accept a job, any job, from Trump especially in his Administration is political, and probably moral, suicide. It may also end up with criminal charges. Everything about Trump is tainted with sleaziness.
55
@Allsop, except that Trump really has no definitive control over Powell. He can't fire him like he can his other cronies.
4
@Rick just like in corporate america, trump can make life so inpleasant for him that he'll quit so he'll be a good little boy and get with the program
3
@Rick
He can't fire UK ambassadors, either, but we all see how that turned out.
1
Soon we will have QE # whatever again.. Good luck future generations..
12
Really, how much more accommodating can the Fed be with its benchmark interest rate at a still historically low 2.25-2.5% and with trillions of dollars of QE created funds still "sloshing around" somewhere in the economy? As former Fed. governor Richard Fisher so bluntly put it two and a half years ago, ZIRP and the various QEs were solely designed to jump start Wall Street in the hope that a rejuvenated Wall St. would see a trickle down to Main St. Besides, the 10-year treasury bond has already plunged from 3.25% in Nov. to 1.95% the other day, thereby doing the Fed's job, at least in the housing market. Of course, none of those extremely low rates ever "trickle down" to credit card users who still have hundreds of billions in debt, if not more, financed at a robust 20% or so. No, this is once again all designed to aid Wall St., as Powell waived the white flag in Jan. after the worst Dec. for Wall St. since the 1930s. Once more, prudent savers and the elderly will get royally hosed.
107
@marty
" No, this is once again all designed to aid Wall St."
Low rates are not on unalloyed benefit for Wall St. While low rates are good for equities, they hurt the banks who rely on lending for their profits.
1
@Jsailor
All in all, the investment banks will take the low rates, because they do not do much of "traditional" lending anymore...they've created all sorts of esoteric trades, branched bonds, etc., mostly exotic junk that is totally dependent on low rates. Just look what happened in Dec. 2018 when rates were at their highest in some 10 years. The investment banks rely on trillions of borrowed repo money, extreme leverage, and don't do much traditional lending anymore.
8
@marty
"Of course, none of those extremely low rates ever 'trickle down' to credit card users who still have hundreds of billions in debt, if not more, financed at a robust 20% or so."
Truth. I am not that old, but remember when only "starter" credit cards were 20%+. Now, that's the norm. It's become so lucrative that every major chain store has their own credit card, because they make just as much from the interest as they do the sales of their products. I remember when I worked in home equity loans, we regularly had people coming in wanting to consolidate 30+ accounts (using their home as collateral). One guy had 136 credit card accounts, and those were just the ones he wanted to consolidate and close! It's insane.
7
Is the economy booming like republicans say or not? The administration that inherits the recession from this mess will be under attack 24/7 by the people who caused it. Insane.
90
Put everything you can into the stock market, because Trump will NOT allow it to tank or even go down modestly, if he can in any way control that outcome...
Between now and the 2020 election, Trump MUST keep goosing the market. He can do it thru manipulation of the Fed, announcing some phoney China Trade deal, hyping the "new Nafta", declaring unending "Wuv" of either Bro Putin or Bro Kim, and any other means to keep the DOW up until 2020.
My plan? As much as I can't stand Trump, I realize that my bottom line is important to maintain or increase...I keep cash, but I am heavily invested because this is a once in a lifetime opportunity, based on Trump's history to date, to keep making money in the market.
I hope I'm right. Depending on how things look in Nov 2020, I may move it ALL into a money market account just before the election.
If Trump wins again, maybe the market will keep going up. If he loses, it could be a relief rally. Either way, gotta be in it to win it...
Just keep enough dry powder to keep the fridge full and the lights on. I'm lucky I have a pension that covers all my bills, and can turn on Social Security before my planned age 70 if needed. (63 now)...
Watch YOUR bottom line like Trump watches his. He will lie, cajole, pressure, lie, force, insult, lie and otherwise do ANYTHING to keep this market alive.
I'm tired of getting upset and fighting about this clown. Gonna take advantage...me, me ,me all the way......
It's the Trump thing to do.
9
@Ignatz
You are playing with fire. There is no way Trump has the ability to ensure you a great return. Stuff happens when you least expect it....remember 2008/2009? If this happens again do you really think this "president" will be able to manage the country out of it like Obama did?
13
@Ignatz
I lost nearly everything the last time the bubble burst: My home, my job, my education (I was in the middle of attending college), my excellent credit, and eventually my marriage.
It took me 7 years to dig out of that. I still haven't full recovered. (I was just about to the point where I was considering going back to school when another bubble started to become obvious again.)
Putting almost all your eggs in one basket when all the signs are pointing to a looming recession is, as Lightwaves put it, playing with fire.
7
@K
Thanks, K, for sharing your story.
1
It seems to me that this is either an indication that the economy is NOT doing well or it is an attempt to appease Trump and his greedy corporate clowns. Either way I have little trust in anyone working for Trump these days. Trump threatened to fire this guy a month ago, something everyone has conveniently forgotten.
73
@Dr. Girl Who didn't Trump threaten to fire a month ago? Only those he fired in previous months. That's our president's approach to working with others. He's a bully. And very sadly, he's our president.
4
@Dr. Girl It's B.
1
“I’m the king of debt. I’m great with debt. Nobody knows debt better than me.”
-Donald Trump in 2016
The King of Debt and Bankruptcy wants everyone to pay zero interest on their loans....and then default on them...and let someone else clean up his mess.
Life is fun when you're using other people's money and leaving them with the check, Donald.
278
@Socrates
...amen to that...Trump is probably the only person in history to inherit/be gifted some $410M and turn it into several casino bankruptcies (and its virtually impossible to lose money as a casino operator). Yet, somehow, someway, fools, and those who willingly want to be duped, continue to lend him money, even to this day. And this is also the man involved in over 3,600 lawsuits during his "business" career, the man who stiffed virtually every party he came into contact with. He is doing the same to America.
44
@Socrates
Donald Trump scolded and threatened Jerome Powell with being fired unless he did his bidding real soon aka before the 2020 election.
Trump is the American Medusa.
Every institution and person whom he gazes upon is corrupted and instantly turned to stone.
39
You forgot the part where he only wants to do so to get re-elected. Keep some cash on hand because what goes up will go down.
14
Everything that our government by the rich does now is meant to help the rich at the expense of the rest of the country.
It is known as corruption.
104
@Grove
What I do not understand is what the Rich want. They do not need more wealth and in many cases cannot even spend it in a meaningful. A lot of them probably do not even know how big their net worth is on any given day. Do they do what they do because they are sadistic, psychopathic, inhuman monsters who take pleasure from the pain of the "common" people? Or do they not even see the rest of us anymore? What is their deal?
2
Rate cuts could come in September and certainly not in July.
@Kodali
I [who don't do this for a living] and another 95% of professional economists [who do this for a living] will gladly take that bet.
And maybe even offer you odds.
If lower interest rates are so good for the economy how about making credit card companies lower their obscenely high rates?
284
@Randy Those high credit card rates are pretty telling—and even people with excellent credit are seeing them.
A good segment of the population is saddled with heavy debt, and the risk of default is being priced into revolving account rates.
If each resident of the USA were viewed as a corporate entity, many of us would probably in junk bond territory based on our personal situations.
26
@Randy
if lower interest rates and chapter 7 clean start bankruptcy is good for corporations, why not reverse Biden's 2005 Bankruptcy unfairness bill and allow real citizens to claim chapter 7 without having to be destitute.
I blame Biden as much as the Republicans and Clinton for 3 strikes, for selling out human citizens in favor of giant TBTF credit card companies and banks. I want him to come out and directly apologize for his huge mistakes both in his support of mandatory minimums and its massive impact on millions of African American families and for his career lifetime support of giant credit card and banking companies. If he makes a commitment to reverse the impact of the policies of the past and put people before profits, and principle above politics, I'll give him my vote. Until then, "thanks but no-thanks Joe." - FYI, keep rates where they are for a year or so before raising - and don't signal weakness with a cut. We need to be showing strength, independence and common sense. Believe it or not, I pray every day that Trump might show more common and moral sense towards the plight of the weakest among us, the people fleeing gang nations, created by U.S. policy in South and Central America for decades. If anyone happened to read the works of the Knight of Malta, Noam Chomsky, you'd know that the U.S. directed C.I.A. assets to destabilize and over throw one democratically elected government after another and supplied masses of arms. Why do they flee?
9
@Tom Paine
"If he makes a commitment to reverse the impact of the policies of the past and put people before profits, and principle above politics, I'll give him my vote."
Even if he does that, he won't have my vote (not in the primary, at least). Why would I go with someone who has to backtrack and apologize for his own record when I could go with someone who has been fighting to reverse past policies this entire time, no apologies needed?
8
The Fed has one mission, the stabilization and well being of the U.S. economy. They look at both the short term and long term ramifications of their own decisions, and what is going on from all places that may affect our economy, whether it be domestic or foreign influences. Abrupt economic swings one way will rebound back the other, at some point. The Fed is always acting in our countries best interests, regardless of which political party is in power in either the White House or Congress. Complain all you like, but leave The Fed alone!
4
So Trump gets his rate cut to help his company and all his buddies and it is due to Trump messing up world trade so badly with his tariffs.
What a world we live in.
124
Lowering interest rates and deficit spending used to be the tools to get out of a recession. Now they’re being used to goose an pretty much well performing economy. So with over $20 trillion in debt that’s already growing by a trillion per year and 2% interest rate, how do we get out of the next big downturn?
192
EXACTLY!
17
@Tom V "how do we get out of the next big downturn?"
By that time, there will be a Democrat in the White House, so why would Republicans be interested in making it possible to get out of the next big downturn?
29
@Dave
Agreed. They want to dump the problem in the dems.
6
If Trump never discloses his tax returns while in office, Congress should at least require disclosure to any future presidential candidates moving forward. Why does Trump lean on the Fed so heavily for rate cuts? Is it for his own political survival or for his personal benefit? Further, has Trump been manipulating markets in his “easily winnable” trade wars to the same end?
38
@MissyR
Because job growth is based on credit expansion. When credit contracts the recession is in and everyone with capital pulls their winnings from the table.
At that point the people holding the bag are the ones locked into the casino, retirements. And when those with capital lay-off everyone and all their gains in this expansion are lost they rehire with less benefits, low wages and no future.
Then capital comes back into the market and is able to scoop up all the assets at special fire sale deals. They sit on it as credit expands (if they can) and then sell it at the highest possible price above what the value is actually worth. Think houses.
That is how rich people make money. It’s not that hard if you can ride the cycle long term. It’s pathetic that Trump went bankrupt so many times.
But he knows that keep credit is what gives the illusion of a strong economy. Up until the credit disappears. That’s why he attacked them with rate hikes. He knew that a recession would start so he is trying to force it further down the road to the next guy.
25
@MissyR
I have wondered for some time now if Trump and his cronies are manipulating the Market for their own gain. Think about it. He announces something, say tariffs on Mexico, the Market plunges, then he says "We've reached an agreement". The Market surges. This has been repeated multiple times with differing targets. Mexico, Canada, the EU, Steel/Aluminum, China. . . .Someone (NYT) should look into this.
34
@WHM: Trump is known for being the king of the short sell.
2
Where have I seen this movie before? Oh, yes, when the Bush administration mismanaged the banking industry leading to the near collapse of the economy. If the Fed allows Trump to make it's calls, what could go wrong? Once again we will have a Democratic president coming into office in the midst of economic collapse. And of course, Fox News will blame the Dems. for the resulting economic depression.
148
@Nessmuck
I know. I’m almost tempted to start asking progressives to pull back on voting for a moderate. If Trump wins and he inherits the recession it would end the Republican Party for a generation.
9
@Mathias, well that's not true. The public has a very short memory with regard to recessions. Remember the last one, that was cause by a GOP admin? I do, but they elected another Republican anyway.
38
Clinton and the dot con runup.
1
Despite Trump's urging for a rate cut, the Fed's action will have little to no effect on Trump's chance of re-election in 2020. If Trump's handling of the economy, especially with relation to his lovely Tariffs however, may indeed lessen his chances for re-election by all the fat cats who vote for Republicans because they think a Republican Congress with a Republican president would be good for their personal bottom line.
5
Let’s not forget that Trump does not view the Fed as an outside entity. Rates will drop in order to spur consumption and decrease Americans’ interest payments during the year before the election. In reality, I suspect that a recession is looming and this is an attempt to hide it.
58
when a problem doesn't go away in the right way, it will come back- unaddressed income inequality and an ever polarized body politic, sounds like no tools to address the slowdown when, not if, it comes.
13
@Patrick The Fed only has two tools -- setting interest rates and controlling the money supply -- and they are both very crude. What, specifically, would you suggest they do?
JerseyGirl, I expect some caution. Yes, the Fed has few tools and should use them only when necessary. A recession cannot be avoided and we will have no tools left to use.
7