Well if the USA economy is slowing , as it surely is, then another trillion tax cut for Trump and his abettors is needed. It worked out great for them the 1st time so let`s do it again. After all "Trickle Down Economics" has always worked in the past (actually never).
America , you are better than the Trump-Kushner crime family & their abettors ……….. aren`t you ?
We've had the Trump Billionaire Tax Cut & the Trump Trade Wars. Now we may be headed toward the Trump recession...just in time for 2020.
The Fed is in a difficult position. Having dumped 4.5 trillion into the private banks in the last decade, it has produced a bubble stock market, a bubble real estate market, and massive amounts of corporate debt--some of it very risky (as described in the Times article on Tuesday), and now being parceled out and unloaded on investors who must take risk to make some income. If the Fed continues to raise interest rates, corporations once encouraged to borrow liberally, will be unable to borrow again to pay their debt at higher interest rates. Massive defaults. If the Fed continues to keep interest rates low, there will be more borrowing, making the problem worse.
This is not just about Trump's ignorant moves--which have been abundant. This is a Fed experiment, the results of which we have yet to experience. Mark Blythe compared it to a firehose, shot through a mail slot, in hopes of reaching the kettle--that kettle of course being the real economy. How we need some wisdom at the head of this economy!
2
I presume most commenters here are brighter and more educated than most people. That being so, I'm shocked that so few commenters seem to "get it:" The cost of high state and local taxes ("SALT") in, say, California is shared by people who live in, say, Kansas.
When I started "doing" my own taxes, many years ago, I was shocked to learn this. I was glad, frankly, since I live in a "high tax" state -- CA. Sharing the burden of high SALT struck me as a great idea. Not fair to someone who lives in Kansas but great for someone who lives in California.
Here's how it works (or "worked," since the SALT deduction now is capped -- though it hurts me personally to say this, it should be "capped" at $0). Lower taxable income means lower federal income taxes, which means someone else's taxes must go up to come out "even." If one can lower one's taxable income by subtracting SALT from it, the economic effect is to share the cost of those SALT with people who don't get any benefit from the governmental services that those taxes pay for -- i.e. the hypothetical "person from Kansas."
This has long been allowed, and still is even though now the "SALT deduction" is capped at $10,000. This means that the "person from Kansas" pays less of my SALT. He or she still pays some of it, of course -- just less than before.
This has always struck me as unfair to that hypothetical "person from Kansas." Great for me, but unfair to him or her.
1
The reason no one has mentioned this is that high tax states have higher income and hence pay higher federal taxes too. They also receive fewer tax dollars back per capital than lower income/lower tax states!!
In essence they put more money in the pot from the start.
I'm confused as to why investors and bankers need such low interest rates to make a profit when they are charging such high interest rates on money they lend. The feds increased interest rates to 2.25-2.5% and now finally after 10 years the average saving rate is hovering around 2%. But the rates to get a home loan increased, and the rates on credit cards increased, and let's not even talk about ultra predatory pay day loans. It's clear Wall Street, big banks, large equity investors have a very strong interest in ensuring the average person stays in debt and can't save much. Individual or household debt will consume more than what a paltry 2% on savings will accrue. Between taxes,insurance, and debt payments, the average household has little to no cushion for a severe economic downturn.
Given that these financial charlatans failed to learn their lesson after the last time their greed and speculation sent the global economy into recession, NO BAILOUTS!!! We cannot salvage the future on a house of cards that falls apart every decade.
Myself and most of the people in my under 40 age range want economic stability and the ability to plan for our futures. For many of us, there was no recovery. Just10 years of treading water and hoping not to drown.
2
Jerome Powel is compromised. This should not be a surprise. Debt ideology has taken root.
3
“We just came out, another chart, we just came out with numbers, the economic report of the president...." How can you fail to believe this kind of evidence-based, incisive and articulate report on the state of something as simple as the United States economy?
3
I'd cut back on other things if I were you:
"I think it prudent for me to halt my spending on booze, women, and movies."
Those all sound like good things to keep spending your money on.
What a house of cards! The deficit souring, the Fed still holding 4.5 Trillion, growth slowing, capital demand weak, consumer confidence slowing, economies in EU and China slowing and administration economic policy based on tariffs and military spending. Oh yes, I forgot to mention the massive low grade corporate debt packaged like mortgage backed securities and roll back of bank capital requirements. The midwestern floods, western fires, tornado havoc and another hurricane season approaching will further stress the system. It seems a crash is coming. What tools will the Fed have if another recession hits? I guess reduce rates and hope for the best. The political cycle will repeat. Democrats being left with another Republican mess to clean up.
7
The man who caused the world economy to be disrupted now reaps the wind.
Except he does not know the whole world is interconnected. He thinks, like many Americans I know personally, that you stand alone as a separate economy.
Except he plans to pay for his tax raids by speculative growth.
When the finest minds in the state body paid to study the subject and the markets are out of step with him by more than one percent on speculative growth, that is a massive, massive disconnect in intelligence.
Dont say the percentages please. Quantify the amount of actual money that represents.
Your sad little reality tv president is costing the rest of the world money. Not just the ones he duped at home with higher taxes.
6
The reference to “Republican Tax Cuts” rings the unintended message that the cuts were aimed at Republicans! Heavens, no! The communists are finding cleaver ways to increase taxes in blue states and that is indeed slowing the economy down.
In whacky states like California, local and state taxes are going up. The leaders of the great city of Angels want to tax its citizens already drooping with tax burden with an added tax to ‘house the homeless.’ The sweetheart deal that the LA teachers received a few months ago also is heading for “a special assessment” for generating “revenues.”
The hidden gas tax is still in full action. The goofy Gavin is talking about more taxes for expanding maternity benefits. Today the governor declared that he wants to tax people to clean up drinking water.
Earlier in the day, the indomitable Bernie Sanders showed up to march with striking UCLA staff clamoring for “living wages,” many fold increase of their current salaries. Great opportunity for more taxes. The governor is also salvaging the possibility of taxing us to support the illegal immigrants- feeding, clothing, educating and housing them in the golden state.
Tax and spend communists…
The quote that the economy “is in a good place” is a reassuring and hopeful message from Feb Chairman, Jerome H. Powell. He is known for being very parsimonious about rosy predictions. The projected 2.1% growth is on the top of an already heated peak. It is great!
Do not trash the good news.
1
So, to recap conservative philosophy, if you give ordinary people money in the form of welfare, they become lazy and don’t look for work. This latest report seems to indicate that if you give money to rich folks in the form of tax cuts, they also get lazy and don’t reinvest it. The rich are not different than the rest of us.
3
Clearly if the tax-cut for the corporations and the rich had been big enough, we wouldn't be in this situation. But we still have time. Before Trump is impeached or kicked out by the voters, maybe GOP can try for another, bigger cut.
1
From the article, onne might conclude that the Fed actually said this:
"The Federal Reserve said Wednesday that the United States economy was slowing more than it had previously thought..."
What the Fed ACTUALLY said was that the economy is growing, not slowing, but that the projected growth rate is lower than Trump predicts.
One could easily (though mistakenly) conclude from the quoted passage -- which appeared in the actual article -- that the economy is slowing. After all, that's what that sentence actually says. The rest of the article makes clear that that' NOT what the Fed actually said, but a reader could easily reach the wrong conclusion from just the quoted passage (which, again, actually appeared in the article, exactly as quoted).
Am I missing something?
Despite numerous comments to the contrary, the Fed isn't predicting a downturn. It's predicting an upturn, though at a slower rate than Trump is predicting. Yet many comments seem to be saying the Fed is predicting a downturn.
Am I missing something?
The monetary policy is run for the benefit of the wealthy investors who own pretty much everything, including the mortgage on your house, all the goods and services we make all day but do not own until we pay for them after work, and of course, the government we elect and they control.
If it ever appears the monetary policy is favoring the masses, it is a temporary coincidence that the welfare of the owners of the political economy happens to align with the interests of the masses. Sure, we need to build their wealth for them, therefore we have to be modestly functional, so when our interests are being looked after, you know the really hard times are ahead.
Just look to when they actually worry about the masses, that's when it's really going to be bad. Even in the Great Recession, times weren't so awful as that because they just bailed out the banks.
4
The item that got my attention yesterday on deregulation was that we should get rid of any rules on how many infants a caregiver can take of. What is the cost benefit of each infant death per unit of profit. It took 50 years for the Cuyahoga River to be able to raise edible fish, but deregulation would make the maximum profit by letting it burn again. We can get all the shrimp and tilapia we need from unregulated overseas fish farms.
4
@Richard
I loved it when you could take a walk along the Cuyahoga with a bag of marshmallows and a stick. Good exercise (except for the fumes) and a roasted treat. Ahhh, life was good.
1
The Fed has a dual mission, and sometimes one part of it conflicts with the other part. That is what is happening now.
The Fed is expected, above all else, to regulate interest rates. It gets this. But it's also expected to pay attention to employment figures. Raising interest rates tends to depress the economy and, thus, employment figure.
Not to worry, though. Raising interest rates right now also means that the US government would need to pay higher interest rates when it borrows money, or when it "rolls over" existing debt (pays it off with the proceeds of new borrowing). A 1% increase in interest rates translates to $200 million in interest, which would depress the economy. That's really why interest rates will not be raised -- economic suicide would be the result.
Our extremely high national debt has boxed the Fed -- and us -- into a corner.
2
I'll be interested to see how the Dec. 2017 tax law affected various income groups. I'm paying higher taxes than before, principally because of the $10,000 SALT-deduction cap. I don't know whether the super-wealthy are paying more, but I doubt it.
The latest year I've seen actually figures for is 2016. I suspect 2017 is available now, though I haven't checked. 2017 is probably not much different from 2016, but 2018 may be quite different. We'll see.
The 2016 figures showed that the bottom 50% of taxpayers paid 2.75% of total federal income taxes, and that the top 5% paid 59.95% (60%). I suspect that "top 5%" figure has gone up, but that the "top 1%" figure (39.48% of federal income taxes in 2016) has gone down, because the top 1% is less affected by the SALT-deduction cap.
3
Nope:
"If the Fed acts as normal the rates will be forced to rise significantly in the near future."
If raising rates is "normal," count on the Fed to be abnormal. With a $20 trillion national debt, a mere 1% increase in the US government's borrowing rate (including when it "rolls over" existing debt to pay off US govt bonds that have matured) costs the US govt (i.e. us) an extra $200 million.
Is that going to happen?
If rates are raised 1%, the answer is "yes" -- it's simple arithmetic. But it's NOT going to happen, which means interest rates will NOT be raised.
1
I think it prudent for me to halt my spending on booze, women, and movies.
4
Powell is a disgrace... a Trump and Wall Streeet puppet. A 180 degree U-turn taken by the Fed from October 3 to Dec. 24 after Wall Stret temper tamper and Trump critiques.
S&P pops 20% on what? Slowing economic growth ? Continued lowering of corporate revenue projections?
NO.
Simply, more free money for big investments banks and speculators.
It makes it all too obvious, the Fed only works for the good of Wall Street, no one else. Shameless. If more people only knew how it works...
The Man Behind the Curtain.... is a political hack.
4
Fed (smart people) knows that Trump and GOP has drove US Economy into ditch, and it's a matter of time before it will come to a halt.. and so they have stopped before them...
Thank you Deplorables.
5
What is really disappointing is Chairman Powell caving to Trump and to the constant drumbeat from Wall Street that rate hikes were a huge problem. What's really unusual are these continuing historically low interest rates. Wall Street hooked to its free money.
Any Republicans out there with the guts to stand up to Trump? No probably not. If you did (think ACA vote), you'd still be getting hammered even after you were in your grave.
27
Long story short: Donnie is tanking the economy one bad decision at a time. Foreign car tariff is going to make U.S. made Honda, VWs and Toyotas a lot more expensive. Good luck with that and trying to sell U.S. cars abroad. Rubes are about to find out why he went bankrupt 5 times...
6
How interesting that Paul Ryan just took a job with Fox Corp., the parent. corporation of Fox News. He'll be on the Board, collecting another paycheck for doing nothing except saying yes to current Board members and CEO Rupert Murdoch. This is who represented you Republicans, in Congress, enabling and smirking and looking the other way as everything becomes about what is good for Trump and his family, and nothing is about what is good for you, for your family, for your small business or for your farm. They have conned this whole country. Don't let it continue.
7
Shoulda given huge tax cuts to the middle and working class and none to the rich class. then there would have been more US spending to juice the economy. The rich just buy assets with the money, not creating jobs. What naive dummies elected this President and Congress?
9
... and all this inspite of Trump’s tax cuts? Wow that is wholly predictable for anyone with an ounce of common sense. Is now a bad time to mention the skyrocketting national debt?
Watching the Trump White House’s economic management is akin to watching a train wreck in slow motion.
7
Penny for your thoughts Mr Chairman. On second thought, it's not worth it.
2
If Russia is listening could they please let us know what impact this Fed Rate notice has on whatever Donald Trump is hiding from the American people in his business, personal and family income tax returns and records.
8
I am hoping this includes a pause in "QT" as well. Global activity is getting increasingly "nervous" - political as well as economic - not helped by DJT . . . to put it mildly. Economics relies on stability and American world activity - current "policy" - is downright scary. Trump is the epitome of the ancient wisdom: "He who knows not, and knows not that he knows not, he is a fool, shun him." Unfortunately, the world economy has no immediate way to jettison this loser as the American congress continues to display a living version of "The Emperor's Clothes."
3
@badman
Just to correct the above - the article indicates the Fed has paused "QT" as well. My oversight.
People who support trump might want to look at this chart of historical Fed Interest Rates.
https://www.macrotrends.net/2015/fed-funds-rate-historical-chart
Notice 1980 after Reagan managed to get the top nominal income rate cut to 50%....a rate that was already high went much higher (over 18%) and took years to get below 4%.
If the Fed acts as normal the rates will be forced to rise significantly in the near future.
2
Trump now owns this economy.
1
So much for the tax cut!
3
2.1% is more reasonable than Kevin Hassett's 3+% or Trump's pipe dream of 4,5,or 6%. At least Powell won't lie for Trump.
3
“Plus 3 percent growth” was a sales pitch used to sell Trump’s tax cut - I’m sure Trump will blame someone else, like GM or the auto worker’s union, when the economy goes south and the “deplorables” will once again believe Trump.
What a surprise the tax cuts under Reagan and Bush, Trump did not create the untold wealth they claimed. What it did do as make the rich that much richer and now the massive deficit and debt untouched. But, don't worry I am sure Trump will yap about another tax cut after all the rich NFL owners need more money to purchase $200 million boats. Whose fault maybe the people that voted for those three Presidents should look in the mirror especially with Trump. How many times do the rubes buy the old "trickle down" baloney before they catch on. Also don't worry according to Trump and the Republicans the tax cuts pay for themselves and the budget will be balanced when the pigs fly. America is on the road like the British a declining empire. I think by the next quarter the jobless rate will be going up and at 73 I know the signs of a recession and we are at the beginning of one now. Of course in the election of 2020 Trump will blame Obama and Hillary. Do love Trump Jr. attacking May about BREXIT. One is it any of his business, second what does he know zero and third the Trump empire is built on bankruptcy and corrupt loans singed by dead people. Me, terrible to say, but the House of Cards is coming down and it is about time that the rubes got it. Jim Trautman
4
Wait a minute.
Remember all the money that middle-class folks got in their paychecks, after the big tax cut, that they were using for purchases? And remember all the money that corporations got after the big tax cut and have been using to reinvest in production and create new and better jobs?
Neither do I.
214
Guess the White House cannot have it both ways. Either the economy is slowing (underperforming) and the accommodative policies can be implemented; or it is doing great and the Fed has to increase rates to prevent overheating. It is unfortunate that the choice probably was a little to early (but they have been to late so many times that you cannot blame them). What is disastrous is that the President has left us with the impression that he can control/dictate the policy. Other Presidents have been smart enough to know why they cannot leave the impression of being able to bully the Fed.
18
My husband and I are retired, but to supplement our Social Securiy and my pension, my husband has a small business as a rep for a scientific instrument company. I also work occasionally. We vividly remember the last recession and try to avoid debt. We were fairly comfortable even last year and almost bought a newer used car to replace my old one. But we held off a bit. In January my husband’s business ground almost to a halt (government shutdown? worldwide slowdown?), a business that was steady for the last six years. We did our taxes and found we would owe $1800 for 2018 vs $600 for 2017. Less had been withheld from Social Security and the pension because of the new tax law. And some deductions we could not take anymore. Our income was almost the same in 2018 as in 2017. The $1800 is due in April, when property tax is also due. We are glad we didn’t get into a car payment and suddenly we are tightening our belts. Are there a million stories like ours? I am guessing yes. From my viewpoint, a possible slowdown seems probable.
95
@SG Did you vote for Trump? Let’s hope some of those millions did.
6
Thanks for sharing. Yes, there are many of these stories from the not well-to-do
7
@Doug-I definitely did not vote for Trump, but have seen reports of those who did who are upset with the result of the “tax cuts.” And I think the slowing economy is affecting those of all political stripes. I would be a bit glad Trump’s folly was being exposed by the weaker economy, if I didn’t clearly recall the pain of the recent recession for so many.
7
Growth is slowing, people are no longer buying what they don't need. Time to reduce government spending across the board and end waste. With debt reduction there could once again be a bright economic outlook. More tax cuts exclusively to average working Americans could be the way forward along with incentives to save more. Tax sheltered IRA annual contribution could be doubled.
9
@Girish Kotwal
Average working people are taxed more relative to their richer counterparts (both in income and wealth). Besides, wealth is produced only by productive work, which rich people don’t perform. So Trump has increased taxes on your average fellow and rewarded his rich pals for work they don’t perform
9
@Girish Kotwal
Time to reduce government spending and end waste?
You mean like Hoover did to end the Depression that was started by uncontrolled Wall Street speculation? What a foolish suggestion.
When private enterprises start to pull back, that is the exact time that government spending should increase. Falling asleep during history and economics classes does not serve one well.
7
@RB from High Spring, FL. What do you think the current national debt is due to? Wall street speculation, which by the way should never have been rewarded with government bail out and stimulus. In this century the the Bush and Obama presidencies with regime change wars ended with 20 trillion dollars in debt. Trump is forced to pile on that with the interest payments on the 20 trillion and spending on a depleted defense force making up for the hardware lost in the useless Bush Obama wars.
What a foolish suggestion to spend what we don't have and keep borrowing?and borrowing and borrowing? I guess you get the message.
Trump has an opportunity to leave the office at no net deficit in his first term even after paying off the interest on the sky high debt mounted by Bush and Obama from useless regime change wars, bail outs to wall street speculators, Bush era tax cuts for the rich and stimulys to companies like Solyndra.
1
Powell did everything the president wanted except wear a Make American Great Again hat. Corporate debt, fueled by low interest rates is the largest it's been since the recession of 2008.
This is just another corporate welfare decision that will culminate in another recession that will fall on the backs of the middle class, and the corporations will walk free, as they did in 2008.
It reminds me of how these banks handled interest accounts when the average Joe places money in the bank and gets a rate of interest of .07 percent. The banks responded saying .07 wasn't bad because they were going to charge the investor for depositing their money. It's a shame the corporatists and oligarchs feast while the middle class eats cake.
Let's vote for democrats to end this Republican nightmare.
49
I agree with the Federal Reserve. Given that the USA is no longer considered an important World Power in either Defense, Foreign Policy or Morality......the EU is now the main power. Russia wants it, but they have to make sure Trump gets another 4 years.
13
@Philip W
"Russia wants it."
Maybe - but with a GDP that is less than one tenth of that of the US, they're not going to get it.
No or little investment in capital goods shows that the cost of money capital is low; therefore, no interest rates going up. Makes sense in economy that’s stagnant. Real productivity increases have been below 1% after 2008. Tax cuts for the rich is indeed voodoo
21
We are already in the first stage of recession.
9
Interesting: The government pays less on the national debt when interest rates are low, will we ever return to a normal time when savers will be rewarded for saving?
12
@David Folts
Couldn't agree more. The Feds have been propping up the credit markets at the expense of the rest of us. The savings rate should never have been allowed to go so low that the Fed no longer can rely on it as an inflation tool. And now, every time the Fed "suggests" it's going to raise rates, Wall Street creates a coughing fit to suggest they will flatline and Trump has a "hissy" fit and somehow we have a new Fed policy for 2019. Sound fishy?! Savers have been savaged for way too long!
JUST THINK how much positive effect there would be for the economy if savers, many of whom are now retiring, had a decent rate of interest and were spending on all the various things they need and how that would benefit many businesses throughout the eonomy - not just the ones targeted by our policymakers to benefit the real estate market, etc.
I don't agree with violence but sometimes I think those French yellow vests may have a point.
3
The Federal Reserve expressed increasing concern about slowing economic growth as it left interest rates unchanged on Wednesday and showed little appetite for raising them in the near future.
---
So what about that 3% growth that Trump and his enablers swore up and down would pay for those big tax cuts for corporations and the well-heeled and the deficit-swelling budgets? Or is this in the same category as the wall Mexico would pay for sure as night follows day?
Well?
22
This clearly shows that he was way off in raising rates. The Fed is almost clueless and may have to lower rates. If they had never raised rates the economy would not be slowing down and we would not have inflation. Intellectuals with no real record of success are at the Fed. Wages are going up so slow that guess what consumption is hardly growing. Look at all the empty stores throughout the retail sector with falling real estate values. Technology is itsking out inflation to the outhouse. There is little to no inflation, real estate is falling in price, wages are hardly increasing, Time for the geniuses to lower rates.
2
You mean that the Trillion dollar tax giveaway isn't going to spur the economy for 5 or 10 years? whodathunkit!
44
Expecting growth this year to be better than last year 3.2% vs 2.9%!with this quarter anywhere from 0.4% to 1.4% with the rest of the world’s economies slowing down due to Trump’s tariffs is let’s say politely overtly optimistic.
7
Raise or lower the fact is that we are in the midst of change that even the most advanced among us do not seem to comprehend. The result will be something beyond migration. A mass exodus is more like it, but not to promised lands, to create compact, consensual communities that manage their own lives and opt out to the greatest extent possible but will favor corporate or government support of their movement and technology and aims. This will be a result of impulses deeper than we have seen and will make the hippie movement look like a prelude with problems.
1
Come the next recession, if interest rates are so low that there is no room for meaningful cuts to stimulate the economy, what then?
The only other way out is by government spending financed by debt. Because government debt is equivalent to large denomination banknotes, any increase will inflate financial markets, and by inflation reduce private debt in real terms. Thus private debt is transferred to the taxpayer.
And now you know the plan, to socialize a mountain of financial markets debt. This is why they have been keeping interest rates too low for too long.
16
Lowering rates is an excellent tool to fight recession. They are currently far too low.
We need to raise them now, so they can be re-lowered before it is too late.
18
@JC
Unfortunately, Mr. Powell has been cowed/bullied by The Donald.
2
How predictable that the White House would be projecting a better economy than nearly EVERY other economic analyst. We are just now beginning to see the results of Trump's policies and their affect on the US economy. We have been here before. Republican ruins the economy on by passing GIANT and unsustainable tax cuts for the rich. Americans weary of the flat wages and stagnant economy. Democrat comes in and fixes the economy, largely through spending initiatives that Republicans condemn because they don't benefit the rich. Then on the cusp of success, the American people elect the Republicans again to start the cycle all over. It's getting old and exhausting.
91
I can think of two reasons why the Fed would say now that it has no plans to raise interest rates this year.
First, our economy is in trouble. I am inclined to agree with this; all the hype from the White House in the world cannot transform our current path into a road to prosperity. Unless Trump means prosperity for his plutocratic buddies, in which case we are there already.
Second, the Fed has given in to pressure from the White House. This possibility, which is worse than the first one above, means that economic objectivity and intelligence will play no future role in Fed operations, and the economy will be treated as though everything Trump says about it is correct. Since I believe nothing that Trump says about the state of the economy, the fact that the Fed is acting as though it does is disturbing to say the least.
I don't like either possibility, because they are both pointing in the same direction: greater wealth disparity, more poor people, and recession or depression in the near future (if we are not in a recession or depression already).
61
@Barbara8101 I very seriously doubt that anyone one the Fed worries about what Trump thinks.
3
The repubs love to explain trumps Financial victory for the economy. Well, first he coasted on Obamas economic changes for the first year and then he na managed to create a huge deficit with his tax cut, a big gap in profits for many businesses and agriculture groups with his "tariff" war. Seems like the great businessman (with 7 bankruptcies and no banks will loan him a dime) is well on the way to bankrupt America.
40
News from the past few months suggests that Trump is puppeteering the Fed/Powell. In true mob boss fashion, Trump, who believes a high-flying stock market and a surge in suburban 401ks is the key to four more years, has grabbed a lever of the market.
Ultimately, I think investors will realize fueling the economy with more and more unreasonable cheap money is only a mask over terrible underlying basics. A combination of irresponsible consumer spending (debt) and unchecked Republican deregulation will ultimately bring this house of cards down on the 99%, probably more painfully than 2008. But will it be before or after the election?
25
Fed predictions were not accurate for 2018. So they increased the rate and messed up the economic growth. They stopped rate increase under pressure from Trump who predicted right figures for 2018. If the economy start to grow, Fed may again increase the rate and mess the growth. Close to 70% of the people are optimistic about the economy under Trump's leadership. Hope the so called experts at Fed and mainstream economists won't mess it up again with their "expert" prediction.
3
@Alex E
Except 2018 was only 2.9% so expecting higher growth this year when the rest of the world is slowing due to Trump’s tariffs is let’s face it overly optimistic.
2
@Alex E Close to 60% of "the people" doubt that evolution is real. many of them think the universe is less than 10,000 years old.
I don't put much stock in what "the people" think about any complex subject--from the economy to evolution to anti-vaxxers to climate deniers.
21
@Alex E
where ever you learned economics lied to you. AS for that 70% figure thinking the economy is good under trump, what you are quoting is a misshapen statement from Fox News.
70% of Trump base Republicans believe the economy is good, that means 30% of his base are starting to open their eyes.
The rest of the nation knows his lying for what it is....his way of life.
The fed did not include a Trillion Dollar tax give away in their calculations. Once passed they raised rates, as is appropriate, to keep the economy from overheating.
Once the bubble, now burst, from the Tax Giveaway lost its effects the Fed announced it would not raise rates anymore.
That is how they are designed to work. They don't let the economy overheat and when it cools they lower rates to spur investment. What Congress has not done, is make any money borrowed from the Fed required to be invested in economy spurring activity instead of lining the pockets of the top execs and institutional investors like hedge funds.
2
I predict people across the world, including Americans, will continue to produce and provide for themselves and their families. Some of them will be so smart and innovative that they will drag us all forward in spite of the terrible drag economic policy by our President and Congress has put in place.
Rates will either rise or contract depending on how effective working people are in counteracting the destructive forces of our President and Republicans in Congress.
It's easy to see why the Fed is on hold. The 100's of millions of working people look terrible overmatched by the rube in the White House. I'm taking the workers in a surprise upset. Rates will go up later in the year.
3
I have a lot of empathy for Powell & the Fed. No matter what they do there will be a group on either side that will criticize them. They do their best to ferret out the data and try to figure out where that will lead and then some no-nothing high ranking government employee who has a MAGAphone uses it to undermine them.
7
For those of us not at all expert in monetary and economic policy, here is the critical question: Is this decision firmly grounded in fact, scholarship and experience or is it a political decision generated by the interests of Republican neo-conservatives, Wall Street and Trump supporters who want the economy artificially juiced just long enough to get them through the next election. Sincerely, I have no way of knowing for sure.
17
Of course growth is stunted. Between the government shutdown and the trade war with China, how could it not be? You don’t have to have a PhD in Economics to figure that out. What the Fed should do is actually lower the discount rate by .25% to stimulate the economy. The irony here is that Trump should have left well enough alone but you know he can’t. So he started a trade war with China and passed a confusing tax cut bill that benefitted corporations the most.
13
Slowing economy? With the stable genius at the helm?! Not possible; we're on our way to Dow 100,000! Probably by Christmas. LOL
15
I think the FED is doing a great job now..........not so much in December but they saw the error of their ways and have corrected them.........can't ask for much more than that!
"The typical member now expects a single rate increase in 2020 and none in 2021."
The typical member is delusional. We'll be cutting rates back to zero before we're raising them again. Recession 2020 here we come. And this time Trump's massive deficit will limit our response.
26
Wall Street wants it's almost free money from the Fed to loan to you at usurious interest rates. That is why they had a tantrum when they thought the Fed was going to restore more normal rates to the supposedly free- but very fixed- market.
15
That’s great news! Now, why did the market drop today?
5
Slowing economy?? Did they run this by "trump"? Fox News?
12
Months ago, Trump attacked Powell for raising interest rates too often. Obviously, Trump was right and Powell was wrong. Powell’s excessive increases in rates slowed growth too much.
This article makes it seem that Powell was right and Trump was wrong. As Ted Kopell stated the other day, the Times reports that Trump is wrong even when he’s right. You need to read the Kopell statement. The man is fed up with the Times’ flagrant bias and the man knows what he’s talking about. Readers need to stop drinking the Kool Aid.
Our leaders today are totally out of touch with the real economy. They live in a bubble.
We have had more than ten years of extremely low interest rates already. How much longer must savers suffer this dreadful situation?
There are very many people, particularly older people, who depend on the income from their savings to eke out their income in retirement. I realise that it is difficult for multi-millionaires and multi-billionaires to understand this fact, but a fact it is nevertheless.
Older people, unless they are extremely wealthy, have little appetite to speculate on the stock market. Old age is a time when people want some stability. These people who make these decisions show very poor judgment and a definite lack of concern for 'ordinary' people's concerns.
It should also be said that the White House appears to be ruling the roost in these matters. Jerome Powell has certainly had an about face regarding interest rates. Only a short time ago, he was determined to raise them. Trump, a man who loves low interest rates, has clearly intervened. Sad! Very sad!
24
"In announcing the end of the reduction, Fed officials acknowledged that they were stopping short of what many analysts had expected when the reduction began."
So the Fed is stuffed with ~$4 trillion of junk bonds left over from the Great Recession and the economy is too weak to unload them, and too weak to raise short-term interest rates above 2.25-2.50. This is pathetic. If we have more than an economic slow down, the Fed will have next to nothing to fight a recession.
33
We watched our Dear Leader complain about the rising rates all last year. He demanded that the Federal Reserve stop their quarter point, rational increases. He said that it was their fault that the "economy" was not growing more quickly. He wanted more, more, more increases in the value of the stock market to prove his economic genius. The Federal Reserve has now bowed to that pressure, and we will see the market bloom into a huge bubble. Thank you, Dear Leader. Who are you going to blame when the market bubble bursts?
9
Glad the Fed changed course.
Raising interest rates (just so you have room to lower them again if the economy weakens) when you have so much under employment, the complete inability to ever hit your chosen inflation target, reduced consumer spending, and only modest gdp growth is foolish.
So who's going to tell that guy in the Oval Office the economy is slowing?
10
The morons finally see the light. Last year they kept bringing down the market and have caused a current global slowdown. Last year the correction hit 20% in the stock market as they said they would raise rates two more times in 2019, they can go take a nap. Deflation is about to rear its ugly head This time conversation should continue about ending the Fed. Let the free market work.
1
Here's hoping the Fed is reacting in benefit of the overall economy as opposed to protecting any asset bubbles or succumbing to political pressure.
5
The Fed's members view is clear and their votes show a pattern that is unmistakable. I'd hoped to see seniors and others earn some interest and see the debt paid down for awhile. It is reasonable to stay put for now, BUT resist pressure to lower the rate. The FED'S reality based upon experience and expertise see a different economy than the Trump administration. The average American is either holding ground or conceding to economic forces. My own situation as a result of the 2017 Wealthy Welfare "tax" was to not accept the tax cut, instead matching that amount and having both withheld only to see that I still owe $3900 to the Federal Government.
11
With the recession nearing us and some toxic asset yet to be revealed what is the plan when it arrives? We cut taxes into a strong economy and increased our debts dramatically. This will make it difficult to spend our way out of a significant recession through government employment.
The only thing I can think of is increase taxes on the very wealthy who won’t be impacted to the adversity of job losses and cutting the military contractor budget in favor of massive infrastructure projects.
38
@Mathias
I am starting to read a bit about collaterialized loan obligations (CLO). Housing indebtedness was at least collateralized in some measure by the underlying real estate. I have no idea how financial lending will fair should the economy tank for a period of time such as we saw at the end of last year. I do not think it will be glorious.
2
trump's tweets & intimidation works again. Fed running scared of trump. New Dictatorships work wonders.
13
@Nostradamus Said So Nah, the folks of the Fed are smart enough, and mature enough, to just ignore Trump. He scares them not.
2
Its nice that there is some group in Washington that acts rationally, analyzing data. Thank goodness (and Congress) for the Fed's independence from the government.
9
Slowing? I thought the tax breaks would pay for themselves?
109
The GOP's tax cut was just a sugar high, which did help the GOP congress, and Trump, pay back some of the cost for those who purchased their jobs for them. It was a good way of getting the lay Trump people to think it benefited them, even though it did not do a lot for them except put their children and grandchildren in hoc. Anyone of those who believed Trump's braying deserves to be holding that sheet of paper that says they now own the Brooklyn Bridge, or that they graduated from Trump U.
82
The Fed did what it’s told to do by it’s boss, Wall Street.
14
I trust the Fed makes these decisions based on data. Trumpsters will pretend Chairman Powell is scared of Trump and that's why he's keeping rates low.
32
the fed will seek any excuse not to raise,,,,,,trump is overjoyed.
2
Trump will surely attack the Fed as he knows more than any economist in history and will fire anyone who disagrees with him about anything. THe emperor has no clothes someone tell him.
43
So much for those big tax cuts Trump claimed would spur economic growth and provide jobs and raises in wages. More gaslighting by the con man squatting in the White House.
108
This is sobering news for those of us who are old and had hoped for some increase in interest on our savings.It is also not good news for stocks because companies are going to be reporting less than robust earnings. It also means that with some more slowing we will be in a recession.I do not want to hear any happy talk from Trump about a roaring economy!
97
"The Federal Reserve left interest rates unchanged on Wednesday and showed little appetite for raising them in the near future, as officials expressed increased concern about slowing economic growth."
Well, first they raised interest rates, which they should not raised in the first place, throw in China, and throw in Trump (tariffs, misguided tax cuts, a government shutdown and another one looming), and a slow down in Europe. Did I forget, a housing bubble bursting in Australia, due to Chinese investors pulling out. Something to consider, when it begins to happen here.
The Fed only raised rates, more than likely, to have a cushion against going to negative rates, when the next recession hits. And, they also need to some leeway bail out "to big to fail" again.
Household spending slowing is a very nasty canary in a coal mine. It is going to slow more more when 15 April rolls around. That tax refund that would have been used to buy a new car, put a own payment down on a house, but that new appliance, buy furniture, buy new flooring, etc. isn't going to be there. Even more so, when those who owe taxes, reduce their take home pay, by have more taxes taken out of their earnings. The Fed knows what its coming, and some consumers have also figured it out, as well.
If Trump shuts down the entire government, in October, he will create a recession. Not only put federal workers out of work, but stop income coming in for those receiving so called "entitlements".
89
@Nick Metrowsky
Trump is very smart in that he is increasing indirect taxes while decreasing the income tax. At the same time he is posturing as though he is protecting american interests. Have any textile mills reopened in US ? Many manufacturing companies moved out of US since china was announced a trade partner by Nixon. They are not coming back.
Yes, there won't be a tax refund but people are taking home bigger pay checks.
But insurance companies have increased rates. So people will spend more on healthcare insurance.
Even then people are getting tax breaks as trade tariff with many countries including china has been put on hold. When tariffs are really enforced then we will see the impacts.
IMHO Tariffs must be brought back to ensure jobs move back to US. Yes, it will be painful in short term. With input prices increasing across all items imported into the country. But if it brings back jobs, it is worth a try.
Let china deal with the potential fallout, their stronghold on commodities across the world must be tested.
@Raj
Well, I suppose that is one optimistic way to look at the brilliance that has been the administration's economic plan. This economy has not produced much above zero percent interest from the FED in a decade. For those of us who have a small nest egg, retirement age, and must have some exposure to the stock market in what looks like a ponze scheme after the last tax cut, we are tired of all this short term pain. The short term pain that has been on-going for the decade previously mentioned.
I can tell you, I do not see a lot of increased discretionary spending in my part of the world. If the tax break was supposed to add anything to my pay check it was almost invisible. I would like anyone to describe an instance where a tariff war produced long term stability in the nation that employed it. Looks more like the last gasp of an economy that has not been performing or managed well for its citizens for a long time.
What got my attention the most in this last down turn was the immediate Wall Street devastation that ensued when the FED moved its interest rate up the relative small amount last time. It was enough for investors to panic unless reassured. There is nothing normal about that happening in a well oiled economy. I will leave to you to ponder what it probably indicates. By all means bring on the short term pain, I am sure it will provide a quick fix to decades long problems.
5
This not a surprise. I predict there won’t be any rate increases before 2020 elections. If any, there will be rate cuts.
7
I would think they will wait for the failed asset to reveal itself but hard to say. The rates are already fairly low.
Predictable as the rising of the sun. All day long the major indices swam in the red, till the Fed pronounced no new rate increases in our future - at which point they began to swim toward the green.
Now we see who is really responsible for those record highs.
8
@sandgk
The jump in the market didn't last long but the yield on the 10 yr Treasury dropped 8 basis points.
4