I respectfully disagree with this "But the Fed, which operates independently of the White House, is likely to make a move driven by precaution, not politics, as it tries to inoculate the economy against the harmful effects of slowing global growth and Mr. Trump’s trade war."
I think this is a cowardly mistake on the part of a Fed that is cowering before the racist tweeter in chief.
7
This is Powell's effort to save his job. He has been beaten down by trump.
3
Humor me.. When the economy is doing so great.. and unemployment rate is at a record low .. then👇👇👇
- why cut the interest rate?
- why we are not paying our debt to build up a cushion for bad times?
- why are we handing out tax cuts the created over 140 billion dollars per year in tax collection short fall?
- If the interest rate is cut beyond its current low level.. how the FED is ganna react when the recession comes? plz don't tell more QEs and negative interest rates the way ECB is doing? or worse like JCB that is buying ETFs?
- why low yield on treasuries when wall street is riding high? are people heading to treasuries for safety...or because they are fearful?
guys.. these questions👆👆👆.. are a BIG proof how fragile the economic system here... this cannot be good..
14
Economists are bad at predicting everything not just recession and many of them are no more than political opportunists. I remember when all the club for growth clowns were screaming for higher rates even after the financial markets collapse change their tune now when Trump started to complain, and how deficits only mattered when a Democrat was in the White House.
4
Only 461 days to go ... will the majority dump Individual #1 ?
7
Another victory for Trump. When people don't stand up to Bullies this is what you get. He attacked the Fed chairman and threatened to replace him, so what happens gee another cave in. This is convince the demented in the White House he won again, you know like the famous tax cut and tariffs which are driving the world economy into a recession which may have started good for his reelection campaign. For all those cheering on how great this is if this was Obama there would be attacks by Republicans and Trump followers who is going to pay for this. My question exactly. One lower the rates and Americans are in debt over their eyeballs, so very little to spend and if they continue to spend then when the crash comes think the 1929 Crash or the 2008 were bad, then just wait. This will not improve the economy but ensure that it falls into a hole. I wonder do the cheers on this site think the bill won't come do someday and sooner rather than later. Yes, follow the man who is losing the tariff wars and also was bankrupt four times. Hey, that is how he made his money stiffing all the little guys that voted for him. Americans in general are not the brightest people on the planet and in reality more along the stupid line. Socialism is bad, but hey what exactly is 6.5 billion to farmers if not socialism? Jim Trautman
5
Trump just wants President Obama's growth economy to last until the next election and he is desperate. This puts us all at risk because it takes an important economic tool to respond to a failing market.
9
The President is absolute correct to pressure the fed to cut rates. The economy is in recession now.
This is just the beginning. December’s rate tantrum that threw the market into reverse was duly noted. We are in the very fragile tail end of a long expansionary period built on a foundation of zero bound rates that filled three purposes: force people into the stock market and real estate to avoid losing significant wealth when their idle cash was adjusted reflecting the real rate of inflation, allow corporations to borrow money on the cheap to buy back their own shares and further advance the smoke and mirror economy and already overpriced stock market and finally to allow consumers to buy big ticket items whether or not they had secure, decent jobs or the Long-Term wherewithal to repay the loans: additionally the rate cuts are being timed to benefit the party in power as the voting public is presented with a political maneuver commonly used by the Wall Street boys known as “putting lipstick on a pig”, in other words to lull you into thinking the current administration is doing a terrific job. Meanwhile, The smartest guys in the room, by American measures defined as those making the most money, began exiting the room(and market)sometime ago knowing it was just a question of when not if the next crash came. Hedge funds even gave money back and closed shop knowing full well that if They lost their deep pocketed investors money they would not go quietly into the night as the mom and pop investors who lose their shirts with a certain regularity in the Wall Street Casino.
14
FED above politics? Yeah, right. SCOTUS is not above politics. Lawyers and accountants,same political animals. Just like the rest of us.
8
Wake me when Hair Furor is out of office.
14
For once I'm glad Trump is a complete idiot. The DOW has't moved tick since Jan 2018. This desperate bump to the market won't last a month. Companies are one quarterly report away from downsizing. The elections kick into full swing right when the reality of 45's credit card spree turns sour. Real people who pay bills and and vote are always tense about money around the holidays and near the end of the year. The Great Trump Crash of 2019 is the only thing that can throttle the GOP's psychotic delirium.
20
Frankly Im tired of getting shafted on my savings. Seems like they want to drain us older ones of what we have saved for over our working lives. Instead of spending interest we are also being forced to spend principle. Crooked oligarchs everywhere these days.
32
Exactly DG! Over the long run, low interest rates punishes savers and encourages debt - both of which end up hurting the economy. This latest move by the Fed is short-term political expediency that will leave few options when the recession really comes.
3
It has been said 1) that presidents take credit for strong economies and blame other sources in downturns. There are voices that say 2) presidents don't really have that much influence on the economy. The President definitely adheres to 1 and may prove the exception when it comes to 2.
1
How many caves are named FED?
1
This should be the headlining article on the front page, not that the *president has said another racist trope about a Democrat.
6
Can someone make a non political, educated comment on the effect this interest cut will have? Thanks
7
What is that creepy photograph of Trump doing in a committee hearing room?
Waving goodbye to America?
6
I was struck by the author's fact statement in the second paragraph about a 50-year low unemployment rate that did not include an equally factual statement about the rate of unemployed not seeking work. Given the NYT's several recent expositions of the necessity for both statistics, I would hope that both are included in the future. If a decision has been made to not do so, it would be nice for someone at the NYT to explain why not. Regards
6
Uh oh!!! 401K cash strategy coming soon! The GOP pump and dump economy coming to a theater near you!
5
As I've said before, I'll suffer a recession any day if it means an end to Donald Trump's term as president. A recession is survivable. As far as American democracy goes, a second Trump term is not.
20
.. the Fed, which operates independently of the White House
Really ??
"The Chairman and the Vice Chairman of the Board are named by the President from among the members and are confirmed by the Senate. "
To survive for more than 4 years, you need to pay attention to who occupies the White House and that occupant's wishes
Greenspan appointed by Reagan, served George H. W. Bush (R-4 years), then Bill Clinton (D-8 years) then George W. Bush (R -4). Ben Bernanke , appointed by G.W. Bush (R- 4 years) then served under Obama (D- 6 years)
You do not get re-appointed when your views class with the President and the (currently R controlled) Senate
The historic record is very clear. The Fed Chair's do accommodate the views of the White House to continue their intoxicating powerful jobs (able to move the stock market with a single sentence) by being attentive to the wishes of the White House
Mr. Powell might be different, but so far I see nothing to support it.
4
@Matt
"You do not get re-appointed when your views class with the President and the (currently R controlled) Senate"
You disproved you're own point e.g. Greenspan and Bernanke.
Cutting rates with the stock market at highs, yeah, this doesn’t seem overtly political at all.
12
And those tax cuts to Trump, McConnell, and all of the patrons at Mara Lago did just what for this country.
Let's face facts. We all know what trickle-down really means...
... especially when it's Trump.
4
Dangerous. Trump's methods of getting what he wants through intimidation will change the politics of our future for the worse (if such a thing as worse than this is possible).
8
I would say the signal is that the economy is frazzled. It is not going up without help. And it certainly has not gone up 3% since Trump took over. He has just as usual blnded his "haters" who love him and sadly will vote for him again, incapable of seeing this mess for what it is. Incapable of admitting they are wrong.
3
This is a big mistake. trump's trying to make sure the economy will not falter while election season is upon us. Don't fall for it folks!
6
We need to cut this disaster short and soon. Why is the Fed supporting Trump’s trade wars, which are responsible for the slowdown?
2
Yes, this is about as good as the economy will get, only this time when the recession comes, the Fed won't be able to do anything about it. We have also increased the National debt while Trump has simultaneously gutted the IRS and they aren't collecting an amount of revenue proportionate to the improvement in the economy. It's like a triple-whammy when it comes, and it will be worse than the last great recession. In other words, it follows the Trump Inc. fraudulent business model of crazily over-spending on things that don't bring business growth while borrowing ever more money to maintain the lifestyle. Only there won't be a Deutsche Bank around to bail us out when the whole country goes belly-up from gross mismanagement.
14
Now the FED has to do it. If they fail to cut interest rates, the stock market will tank, Trump will go on a twitter tirade and the oligarchs of America will run around with their hair on fire and threaten to withdraw their billions in support for Republicans. This is not economic policy. This is political partisanship gone wild.
16
So if the banks aren't making money on interest rates where do they look for income - service fees, credit cards, high risk loans. Who pays those costs - the poor and middle class.
18
Instead of cutting interest rates, or giving trillion dollar tax cuts to the already piggishly wealthy, how about investing all the money (and more if needed) in creating sustainable jobs that pay a living wage? If the majority of Americans experienced the benefits of these actions, they would finally be able to have confidence in their futures and become the dependable driving force the economy needs to escape these "boom & bust" cycles.
But because the "trickle down economy" is designed to reward only the very top, the 1% and Corporate America, at the expense of the workers - consumers - it works against itself. The economy needs consumer demand to function well, but consumers are at the end of the food chain in a supply side (trickle down) system.
The current system is broken. It's like driving an old beat up car: you can keep it running by constant tinkering and repair, but you never know when it's going to break down. It's long past time to trade in the old Reaganmobile and return to a proven model of a New Deal model.
10
The United States needs to calculate the inflation rate honestly, not using the current calculation which has been in place since the early nineties and excludes food and energy - necessities.
Inflation is much higher than the Fed and DC pretend. When gov't agencies calculate the cost of living/inflation for Federal employees, they use a different calculation - one that keeps salaries rising for the public sector. Wages have been held down because of this; companies give out 2-3% a year as that is considered the inflation rate year over year.
If the Fed used the 1990 calculation, which includes things like food and energy, inflation is between 5-8%; using the 1980 calculation, it is 6-10%. Wages will not increase (outside the government payrolls) as long as the Fed uses bogus statistics. Why isn't the NYTimes reporting on this?!
6
Trump wants to control the Fed and the FBI, both independent agencies, not normally (or legally) under the executive power of the president. He dumbed down the DOJ by firing Comey and pushing Sessions out, and then hired Barr, the master of giving pardons like Christmas presents as attorney general..
Now Trump is trying to control Fed chair Powell, urging him to give up his independence from outside influence.
So the narcissistic Trump wants all the agencies of government to play by HIS rules, not those rules prescribed by law.
Could the real answer for a slowing US economy be found in the fact that more than one half of the population is losing its purchasing power because they are not able to earn a decent living wage?
The extension of credit to the deprived-income ridden middle class can only last for so long. Therefore the reduction in interest rates won't cut it for them.
The only way to increase the GDP is to give the majority of American workers sufficient income to make purchases.
6
I thought the lead photo of Mr. Powell testifying while a photo of Trump is looming behind him spoke volumes. Fed independence? You make the call.
9
As good as it gets? The Dems certainly hope so. a slip in the economy helps them. Its all about 2020!
2
I oppose a cut at this time. i understand the reasoning behind the anticipated move, but I fear the Fed will only weaken its future arsenal of ammunition. The handwriting is on the wall. Yes, a recession is coming. The world wide statistics reveal this. However, for the Fed to reduce now only prolongs this Trump inspired decline in economic growth. It has been proven Trump's economic savy is a void of non understanding. With this dunce in the white house eventual economic near collapse is inevitable.
5
I hope the US economy doesn't go the way of Trump's casinos.
9
Left out:
Alternatively, you interpret the rate drop as the US's opening shot in the currency cold war
https://www.cnbc.com/2019/07/22/the-us-will-likely-win-in-a-cold-currency-war-pimcos-joachim-fels.html
The side effect of ZIRP and QE is to make the currency cheaper - practiced by the Fed, the ECB, and the BOJ for a over decade
For more read
https://www.economist.com/finance-and-economics/2019/06/22/low-interest-rates-and-sluggish-growth-may-lead-to-currency-wars
2
Interesting - must be a weak economy - 2.1% Oh my yes it is.
I've come to the conclusion that everything Donald does is for his own selfish business interests. And thus, he's promoting a rate cute. He has no interest in what's for the good of the country.
4
I keep on thinking: What if there were no trade wars? What if the recent tax law was focused on the middle class instead of the upper 1% of the nation? But would-of's and could-of's get us nowhere. Ironically, in spite of the blustering, blathering Trump and his wealthy compadres, our present economical paradigm is not getting us far either. I remember Reagan's famous "trickle-down" philosophy. I will not repeat the analogy drawn by my husband during that time. Let us just say we were not benefitting from it. In fact, it was much to the contrary. One more thought to add to this less than joyful state of affairs. That is health care. If we do not make it more affordable and universally accessible, the threat to not only our personal health but also to our nation's is inauspicious.
11
Here's hoping there's an interest rate left to cut when the inevitable recession comes.
8
Based on Mr. Trump's non-stop pressure on the Fed to cut interest rates massively (his latest tweet this morning: The Fed has made all of the wrong moves. A small rate cut is not enough..), it appears that he understands the Federal Reserve system better than Powell and Co. As such, it may be a good idea if he fired Powell, and became the Fed Reserve Chairman himself. And, of course, in the course of doing so, he gives up his position as President of the United States.
8
Maybe I'm over-simplifying, but I thought the general idea was that rates should be low until companies face significant competition for labor, and then raise wages to compensate, and then still struggle to compete for labor even after they have raised wages.
Then, and only then, are higher interest rates warranted.
I believe Chairman Powell summed it up in a Congressional hearing: "if the economy is hot, we would expect to feel some heat."
We don't. Therefore they should not be raising rates to cool it off.
3
@Anonymous One thing the US does not need is yet more cheap debt, which is the direct result of lowered rates. That, and further inflated stock prices. Take a look a 20 year graph of stock prices sometime. The Dow Jones average has gone from 5500 to 25,000. Ask yourself if that is either healthy or sustainable.
7
How is the Fed going to counteract the appearance of having bowed to Trump's demands and threats ?
9
Re: That’s enough to fend off economy-harming deflation.
That is simply not true.
A simply plot of the GDP per capita, of Japan 2001-2008, and the US, 2001-2008, shows that the GDP per capita grew faster under deflation in Japan, than the GDP per capita in the US under inflation (and the housing bubble)
Time to retire this myth
2
Inflation, depending upon which metric one chooses to use, is currently in the range 1.6% - 2.1%. The Fed Funds Rate is currently in the range 2.25% - 2.50%; i.e. higher than rate of inflation. Is inflation too high or to low? If the former, which is the current opinion of the major central banks, then a rate cut is quite appropriate.
1
Excuse me! Where is the financial crises? Oh, that's right, it is election season.
8
the economy needs very low rates to sustain progress...is that because corporate America isn't INVESTING in our future, instead spending record profits on CEOs and stock buy backs?
also, is it the Fed's job to protect the American people from the reckless, backward policies of an inept POTUS? how will the people learn the lesson of electing such a stable genius if his ruinous policies aren't allowed to play out?
8
@Jonathan Smoots ... corporations are not investing because demand is relatively attenuated due to aging demographics and accumulated debt. Increased demand requires that someone start spending; i.e. consumers, industry, or government.
2
@BD So then perhaps it would have been more stimulative to give each tax payer a check for $1k rather than reducing taxes for businesses?
8
We are now officially sailing on the Titanic. Think of each quarter-point in fed interest rate as one lifeboat. If the fed rate is 5%, as it was before the last recession, they have 20 lifeboats to deploy in the form quarter-point cuts to save the economy. When times are good raising interest rates is like building more lifeboats to increase the Fed’s “economy saving” capacity in the event of a recession. But now the fed has stopped building lifeboats when it has only half as many (current fed rate is 2.5% - just 10 lifeboats) as it needed to save our economy during the last recession. Worse, it is currently using them when, by many accounts, the economy is just fine (record low unemployment and record highs stock markets). Every rate cut now means one less life boat to save us when the economy really is sinking.
14
Re: "....the Fed slashed rates to near zero as it tried to rescue the economy. The Fed’s approach has largely worked — the United States economy is growing, unemployment is at a 50-year low and wages are slowly rising."
This position is an opinion -- not a demonstrable fact -- and should be clearly marked as such. Sure, economic theory predicts that slashing interest rates *should* stimulate economic activity, but economies are about much more than interest rates. It would be good for the US economy if more Americans understood just how much uncertainty the Federal Reserve must deal with.
3
Sorry, but why is there a large screen (several screens?) with Trump’s smirking face displayed on it at a House Committee meeting?
Are we not even pretending to be a democratic republic anymore? Just straight-up authoritarianism?
Details matter. This is not normal.
17
@Prodigal Son
I was wondering the same thing. And such a goofy image (is he pretending not to hear a question?)....weird!
5
The Fed's dual mandate has long been forgotten, and now its only mandate is to obey the Emperor and to, therefore, keep the stock market propped up by easy monetary policy, even though there may not be any economic justification to ease. Mr. Trump, the evil genius, understands that, to maintain his popularity and to get re-elected, he has to:
a) Keep his core base energized with guns, God and hatred towards minorities, immigrants and progressives;
b) Keep the rest of the country appeased by pushing up the stock market.
6
I suggest you take a look at the interview Trump did on MSNBC in September 2016, in which he accused Janet Yellen and the Fed of keeping interest rates artificially low ‘to make Obama look good’; said the low rates had created ‘an artificial stock market,’ and noted that ‘people who did all the right things’ by saving for retirement were being unfairly punished because they can’t live on the interest on savings anymore — as if he could care. Trump also pointed out that he ‘loves low rates’ because — no surprise here - his real estate investments are heavily leveraged and he’s saving tons of money on finance costs.
It’s right up there with the ‘beautiful health care plan that will cover everybody,’ the ‘infrastructure program,’ and all of the other Trumpian carnival barker flim flam.
But when everyone’s busy chasing after his latest inflammatory tweet, you’re not supposed to notice he’s just stolen your wallet.
22
The skeptic in me wonders if the people who are rooting the most for a reduction have a "personal business" short-term reason for doing so.
It does seriously question the extent of independence of the fed, when its not setting policy to conform its twin mandates - stability of value of currency or a high unemployment situation.
5
Most of the people appointed by Donald Trump are geared towards protecting him and NOT our nation. What we all hope is that Federal Reserve chair Jerome Powell is cutting rates because he wants to do what is best for our economy.
6
Given the Fed's interest rate I have to wonder why I'm paying the government ~8% interest on a Parent PLUS loan I took out to send my kid to college. That just seems extortionate
14
Every book I read on this subject claims that varying interest rates is an important tool to keep the US economy on a steady keel.
Yet, the fed is about to use one of its most powerful stimulative tools when the economy is (allegedly) strong. Perhaps it isn't strong. Perhaps the "data" Powell refers to constantly, is alarming. Perhaps Trump needs a strong economy to win 2020 and Powell is accommodating his political demands.
No matter the reason, lowering interest rates is designed to increase velocity and thereby boost GDP. If GDP wasn't faltering, Trump wouldn't be demanding lower rates. Given Trump's penchant for spectacular lies, nothing he says should be relied upon. On that subject, my entire class agrees.
11
Many observers believe this move by the FED is under Trump campaign pressure. In the tariffs war U.S. is risking, in the middle of the Presidencial election's year, to show a significant decrease following a catastrophic Wall Street reaction, which is the Trump's own barometer, widely shared by his bases, for the Economy. Sanity doesn't like to be the dominant force in politics today, at least in the U.S. China is clearly in a waiting stance as are the Europeans. China actually may perhaps prefer the wait, even if it touches its own performances, Xi knows he can count on the 'discipline' in the society... bad moments would be transient, wouldn't they? In the U.S. the loss of Trump reelection would be nevertheless the Quake, the Big One, in Washington... Bells on the streets, ringing the end of recreation?
4
The FED is providing more Ultra-cheap money to Wall St. for more share buybacks further inflating equity markets. Meanwhile, US government debt now exceeds $22 trillion, is growing circa $1 trillion annually and does not include municipal, corporate or consumer debt. These deficits are going to grow with Trumps 2017 tax cuts and his gargantuan military appropriations. Since becoming President, Trump has allocated over $ 2 trillion of taxpayer money for the Pentagon, including the two-year budget resolution, overwhelmingly approved by Congress last Thursday that provides $738 billion for the Pentagon (a record amount). The structural economic problems, which gave rise to the 2008 financial collapse, have still not be resolved.
13
Are any of Trumps loans tied to the Fed Funds rate?
8
The Fed will be making a colossal mistake by cutting interest rates at a time when the economy is strong and unemployment is at its lowest level in decades. The economy has been getting stronger and the unemployment decreasing for almost 8 years now. It is unprecedented for the Fed to cut interest rates at this point in an economic cycle. It looks like succumbing to political pressure, and bad policy.
12
@John A
Don't you think it's a colossal mistake to give Trump and his wealthy donors tax cuts at this time?
2
So much for the great economy Trump keeps selling to the masses. Recession here we come.
7
And they step on the gas again. Get ready for a recession, now that the transfer of wealth has been completed and the new consumer debt load distributed.
21
@sedanchair Company store...just on a grander scale.
Strong employment, solid growth, shortages of both low & high skill workers........little to no inflation, seems like a time to maintain, or even tighten. Strange times we live in, have to believe this equity market driven decision along with many others will come to a crashing halt.
11
The economy is where it can be for right now. There is no slack for demand to fill. The prudent thing would be for Trump to settle matters and end the tariff war with China. That would remove the only significant drag on the recovery at this point. We are not going to bring back industries that are firmly established overseas. We may create new ones and expand ones with which we are doing well, though. But China must be seen both as a competitor and a customer. The global economy will be the economy in the future.
7
Fed may as well come out with a statement. We will be big buyers of stock. And prohibit short seller make it outlaw. In that way everything is clear and we don't have to interpret their intention
1
If the economy were great, we wouldn't need a rate cut.
22
Economic reforms are painful, and politicians in need of re-election are reluctant to do what it takes. Enter the Central Banks.
After successfully coping with the financial crisis by means of low interest rates and gigantic purchases of government bonds they continued to pursue this daring monetary policy. They wanted to buy time for the countries plagued by the crisis so that they could reduce their debts and make long-overdue structural adjustments
Unfortunately, most of the affected states did not use the purchased time for debt reduction or sufficient reform. On the contrary, the total debt of states, households and companies grew by no less than 150% from pre-crisis levels within ten years. Because of those who needed the printed money most, homeowners with under water mortages were not credit worthy could not get their hands on it, free trade and technology-related factors prevented the rise of US consumer prices, the enormous liquidity spilled over into the investment markets, where the inflation of stock and real estate prices, boosted the wealth of the already wealthy, while the small savers and the pension funds were punished.
This aggravated the social differences and thus prepared the political ground for populists. By now, the markets have become so used to the drug of cheap money that it is no longer the economic fundamentals, but the interpretation of the facial expressions of the central bankers that steers their decisions.
6
Free money for corporations so they can engage in buy backs and speculation. The rest of us get no benefit and will pay the price when the bubble bursts. The USA is no longer a safe place to put your money. Every single one of its institutions is manipulated for the benefit of the mega rich with the belief that others will pay for their mistakes. We have been betrayed.
32
The Fed also was politicized in 1971 when Nixon leaned Burns to lower interest rates to augment the economy just prior to the 1972 election. It was instrumental in leading to the end of the Bretton Woods system.
The point of the current pressure to reduce interest rates is the same - the economy is the only thing (other than racism, er, nationalism) that Trump has going for him. A main difference, however, is that the chronic debtors, known as Trump Inc., get a break, and speculators find the cost of betting is lowered. Owners of real and financial assets have increased economic rents. The poor can increase their credit card debts - it's a Republican welfare scheme.
19
@San Ta
Yes. The whole thing is floating on thin air. "Creditopia." People try to apply the old circular flow economics. NOT. Magical thinking - Slip. slidin' away.
Lowering interest rates now will severely damage the Fed's reputation for objectivity because -- rightly or wrongly -- such a rate cut can easily be seen as an effort to assist Mr. Trump's reelection bid. It simply looks like a political move, especially given Trump's public badgering of the Fed. A politicized central bank -- even one that merely looks politicized -- in charge of the world's most important reserve currency can be looked at with nothing short of alarm.
19
Businesses have not been given enough reasons to invest in greater production of goods and services, so they have done little of it. What this tells you is that their opportunities to sell more are not evident to them, so they are not risking losing money on failed expectations. Trump looks at financial markets but he does not seem to see that those businesses who produce new wealth are not eager to invest a lot more capital to make a lot more wealth. They don’t see the opportunities, yet.
Tariffs cannot fix this. While it worries trading partners, it will not improve the domestic economy. Tariffs are useful for protecting domestic manufacturers from foreign manufacturers. They hurt trade. When domestic manufacturers are global trading customers, tariffs offer no protection for these manufacturers. And our most lucrative consumer products are all the result of domestic manufactures who trade globally for components and both global and domestic assembly or production of what they sell.
Making it far more confusing. Trump represents the tariffs as negotiating tools. That means that if they work, they go away. If they go away, the trade internationally for the goods will resume and the domestic sources for those goods will adjust accordingly. Any new line of production based upon tariff pricing will be shutdown. The goal of negotiating would have been to open up markets for goods from the U.S. in China. That is the goal, not expecting to have the U.S. return to 1970.
3
More corporate welfare. This is about as anti-Capitalist as policy could get. I wonder who cares.
20
This latest move just shows the fallacy of "supply side" economics. If, instead of that "tax cut" going primarily to the .1% it had actually gone to the 99%, we would actually be seeing an increasing GDP. Since our GDP is 70+% consumer spending, putting that money in the hands of the actual consumer (instead of the tax havens the wealthy prefer), that money would circulate in the economy with the multiplier effect that would push into higher wages for those that actually produce products. As a side benefit for the current occupant, it would also stimulate US production, since those that purchase such products would have the funds necessary to make those purchases.
22
If the Fed is supposed to keep the economy from going into a recession, then why do people say a recession is inevitable? If that is true, then It only goes to show that the Fed’s policies do not really work. The Fed was setup specifically to stop the boom and bust economic cycles of the 1800’s. Which is terribly ironic since the worst depression ever (Great Depression) occurred after the creation of the Fed. It’s fairly obvious that the Fed has failed in its long term mission which then begs the question: why do we even need it?
2
Oh, little things. Like the Fed isn’t there to contradict capitalism and its business cycles, but to smooth out booms and busts, so we don’t careen back and forth insanely.
Of course, careening back and forth insanely IS our current President’s whole thing.
9
@Mike L
In the real world, nothing man does is perfect. Nothing, ever. So, why do people believe that if something is not perfect, then it does not work at all?
The fact is that humans always try to affect their condition, the environment in which we exist. Some things work better than others. Certain people like to look at policy and resultant data and try to improve (not perfect) the current situations. Then we have Conservatives.
BTW, Fed policy is very much secondary to Congressional legislation.
1
Monetary policy cannot create wealth and domestically we are not creating enough new wealth to provide the leverage that makes monetary policy useful.
2
On one hand, I think they just can't help acting out of their own greed and self-serving nature.
On the other hand, I wonder if they're allowing the timely weakening of the economy because of their fear a Democrat will win in 2020.
5
Good to know that Jerome Powell pushed back against Trump's assumed ownership of the Fed by.... doing exactly what Trump wants him to do.
15
Economic recovery for whom?? ah the so called investor class which not longer believes that rising tides should lift all boats just that rising tides should lift their boats. Once upon at time we had unions demanding that they should be included in the rising tide and management complied.
Now we have the gig economy or full part-time employment without medical or pension plans -- both of which we are now sure are socialist!
Time for all sorts of corrections. Elizabeth Warren for president.
16
“The Fed acted too soon. I turned out to be right, they acted too soon and too violently,” Mr. Trump said on Friday at the White House.
Donald Trump, the man who can’t even keep a casino in business, is second guessing the Fed and, apparently, the Fed is taking his advice. God help us when the next recession arrives and nothing can be done because interest rates are already so low. Another example of how consistently short sighted Trump and his
people are whenever they make a decision.
37
And if ... When ... Something bad happens in the economy Trump will, just as he does with everything else, take no responsibility and pass the blame and insults to some else.
23
Yes! When the next recession hits, Trump will blame the Fed for not being able to cut interest rates enough to stop it [ because interest rates were already so low].
9
@John Hanzel
It will be Hillary's fault or Obama's fault or the fault of the Democrats in general.
1
Based on 40 years of results:
Conservative, and now mainstream, philosophy: Increase National Debt during times of recession. Increase it even more during times of expansion. Spend and put the debt on the kids.
Radical. left wing socialist philosophy: Increase National Debt during times of recession; Try to pay it down during times of expansion.
20
Here the feds come to soften the wasted conservative economy blow, just before the election. How much do you want to bet that every republican will still call it a strong economy up to the moment Trump loses? Only then, once someone else is in office will they take off the rose colored lenses.
13
@Dr. Girl Reality Check this is age of The Great Disception. Did same thing in Great depression stop posting truth about misery of poor . This time raising debt limit to pay off the debt cheap dollars is one way for poor get poorer an rich get richer only there money worth alot lest in value
"While the United States economy continues to chug along, cracks are beginning to show."
I've been predicting a slowdown, if not outright downturn, in 2020. I can't see this economy sustaining stability--we are drowning in debt from the tax cuts (heist), the production cycle is mature, there's trouble across international markets, and consumers eventually will fold once prices start rising--which they will if consumption declines.
The stock market has been in a bubble for some time. This has the makings of a more dangerous quick recession that could decimate people's savings.
Jerome Powell is trying to stay neutral: how long that can last under the crushing attacks from the president is unclear at this point.
17
When the next recession starts:
(1) US government is deep in debt and has such a big deficit that it cannot help the people who lost their job, healthcare, or house.
(2) The Fed cannot cut rate to stimulate the economy because the rate has already been so low
(3) Many corporate debts and student loans will default, leading to financial crisis
(4) The country is divided. People on different side of race, religion, economic status, political belief just hate each other.
(5) Many people full of hatred have guns
(6) Very few people trust the government
None of the above alone is incorrigible. But a combination of all above will likely lead us to a disaster beyond imagination.
20
@Shell W.
and...have a nice day.
If Trump had not acted up with the alpha displaying, the economy might have done better. His knowledge of economics is of the undergraduate who never really wanted to learn it, barely passed, and listens to which ever economic advice confirms with what he wants to hear. The economy has been slowly recovering. Gradually the consumers were gaining the ability to buy more. But his policies though popular with businesses and conservatives actually took some energy out of the expansion. His tariffs are raising prices which weakens demand and his tax cuts while giving a temporary boost actually took a lot of money out of circulation as corporations improved their assets versed liabilities financial balances, improving their worth on their books instead of investing in greater productivity.
Trump requires capital to operate businesses which provide services which use up money that represents wealth created some place else. He is not a curious fellow, he does not care how that wealth was created. So his views of economics are rather out of context, he only sees what directly affects himself.
Our economy suffers from the country having grown tremendously until the mid-1970’s and then shifting into a far slower expansion because the growth shifted to the global economy. The U.S. has benefitted from the global expansion but not enough to make up for the loss of productivity domestically.
2
We've had years (decades, actually) of declining interest rates and slowing economic growth. You mention "population aging and slow productivity gains" as causes. For sure those have an impact, especially in the past decade as the Boomers have started to age out of the economy. But you fail to mention the likely biggest contributor to economic malaise - debt. Debt across government, business, and consumers has steadily expanded since the Reagan administration and bumps higher with every interest rate reduction and tax cut. Debt is steadily suffocating the economy. While the business cycle will continue its progressively smaller ups and downs, the end state will be no disposable income left to do anything but service the debt.
3
Unless there are surplus revenues or severe termination of public services the direct result of tax cuts are always deficits and relying upon borrowed money to fund budgeted spending needs. Reagan clearly states that he expected the cuts to drive up economic expansion to where the lower tax rates would still provide greater revenues than before the cuts. Reagan believed this even though he could not make it happen.
Republicans have been insisting that this is a rational strategy despite the evidence that it does not work. In addition, when the new wealth generated cannot be recirculated through the domestic economy, it’s not going to expand it. It cannot be used to fund public services because it’s not taxed enough. The effect is to force people to borrow to meet their needs because they have too little surplus income to save or to earn money through investments.
1
In other words, Jerome Powell is worried about keeping his job so he's going to do what President Trump wants, irrespective of the precedent it sets or what it does to the independence of the Fed.
Yes, the economy is slowing but interest rates are still at historic lows, keeping them where they are currently seems to be the best course of action. The risk with lowering the rates is that you lose the benefit of rate cuts for the next recession--if you have rates near 0 then there's not much wiggle room outside of extraordinary actions like QE.
7
Batten down the hatches folks, the recession is coming.
This house of cards will fall soon. Remember, London is the financial capitol of the world. A no deal Brexit seems more likely than ever with Boris Johnson at the helm, and could be the tipping point that sparks the market collapse, as early as October.
We have an intellectually lazy president obsessed with tariff wars, and federal, corporate and personal debt rates are at historical highs. Housing prices have risen wildly in the past few years in many parts of the country. Millennials are not buying homes because of record student loan debt and low wages. Climate change will continue to drive increased migration from hotter and coastal areas of planet earth. Economies in central and South America are already in contraction. If the recession holds off past 2020 and Trump is re-elected, when the reckoning does come, his buffoonery will make it that much worse.
Vote in 2020 to save our economy and our country.
23
@Dabney L
Yes, vote. Yes, elect Democrats. And, for the sake of our country, I hope Democrats win on all levels.
BUT - you what will happen. A Democrat President will assume the head of the country facing a financial crisis created by Republicans. And McConnell will probably still be elected senator from Kentucky. Do you think he will take any responsibility for the mess he had a major part in? Of course not. He’ll be just as obstructionist as he was with President Obama when we faced another financial crisis.
The only hope is that Democrats take control of the Senate and McConnell is in the minority.
13
@Maxi
Even better would be McConnell voted out of office.
2
I'm starting to see a pattern here: GOP destroys the economy to help their rich buddies, Democrats get elected to clean up the mess, GOP gets elected and takes credit for the recovery. Rinse and repeat.
60
@Character Counts
Exactly!
1
Very poor precedent to set - ceding monetary policy to the executive branch to serve it's reelection aims.
Very poor precedent.
19
Is the media joining President Trump in making it very hard or impossible for the Fed to operate independently, as it must to best manage our economy?
I heard Powell's comments. I did not hear him say the Fed would cut rates. I heard him say the Fed was keeping an eye on the economy at a time of uncertainty resulting from tariff talks, among other things.
It's bad enough the Fed should feel any need to pause their slow move toward a more normal and protective interest rate. The drum beat now is for it to actually lower interest rates when the economy has often been called relatively strong.
Please, don't set investors up for the expectation that the Fed will actually cut rates. Who on the Fed has said that? Please, don't help undermine the independence of the Fed as Trump continues to whittle away at the checks and balances to what he wants when he wants it.
6
A few more months of Trump's unhinged political and economic behavior will see the U.S. economy sinking into a deep depression along with all of its citizenry.
19
This is very bad for The Fed the be politicized. When the crash comes there will be no where to go with interest rates. Wake up people-Trump is manipulating the markets for his own gain.
16
The Fed makes a move to protect Trump from his own worst instincts and he thinks he hit a home run.
Makes perfect sense in Trumpworld....
18
Trump claims to demand a cut of interest rates because it will be good for the economy, or more specifically, the stock market.
But don't we all know it's really because it will personally save him millions in interest on all the debt that he has been piling up since the '80s?
11
Trump claims to demand a cut of interest rates because it will be good for the economy, or more specifically, the stock market.
But don't we all know it's really because it will personally save him millions in interest on all the debt that he has been piling up since the '80s?
1
Poor Seniors who rely on interest rates on savings will be hurt.
8
@Philip W Interest rates on savings accounts/CDs haven't been available since the early 1980s (12.5% on a 6-month CD). That will NEVER happen again.
4
But I thought Trumps win in the election was going to ruin our economy?
Instead it got much much better. Once he redirected it away from Obama's Globalist corporate agenda.
And tax reform you said was a "sugar high". Well that proved false.
Obama never had a GDP over 3% year over year. First president in history never to have one. He called it a 'new normal".
Thank god we have a president who's serving the interests of the regular people.
I didn't vote for him but surely will next time.
No more Democrats for me.
1
@Ari
By what measure has the economy gotten much better? Not job creation (down), wage growth (flat), or GDP (still in the high 2% range). So far, Trump also has not had a year with GDP growth over 3%. Last year was 2.5%. That’s slower than during Obama’s last year in office.
I can't figure out if this is being done to stimulate the markets or Trump's fragile ego. Either way, this is no way to run an economy.
12
on Sundays I often go over to Crazy Henry's apartment for consolation. he gets me so mad I forget about the long gray hours after church. this particular Sunday was no different. after we shared popcorn and sardines for dinner, he casually remarked that the Fed would lower interest rates this week because he had recommended the action to his good friend the head of the Fed. I openly scoffed at him for saying such twaddle.
"do you even know the name of the head of the Fed?" I asked derisively.
"sure I do. Donald Meek" he replied as he put on ESPN.
"Donald Meek was a character actor in the movies during the 1940's" I told him emphatically.
"coincidence makes for many strange bedfellows" was his only reply, as commentators began analyzing the latest soccer riot. Crazy Henry got us each a glass of tap water with an olive in it. "know what I think?" he asked. "what now, Bernanke?" I replied. "the market is soft so now's the time for the Fed to make good on its promises from the Geneva Convention" he said. I digested this piece of nonsense for a while, fishing the olive out of my glass and eating it. it was hollow; the pimento had fallen out or something.
"what should I do with my portfolio then?" I finally asked him. "sell short and invest in bimetallism" he replied immediately.
Like I said, he's crazy as a loon.
turns out the soccer riots were taking place on Wall Street, according to ESPN.
4
“The current economy could be as good as it gets.” So what’s wrong with that? This obsession with endless growth and economic expansion is ruinous.
5
Wow! GDP growth of 2.1% is a "decent growth rate" according to the writer. That's funny. I distinctly remember 2% growth during Obama's time as hideously low and nearly catastrophic. Dotard himself said it was as bad as it could get and that under his reign, growth would be 3, 4, 5, even 6%." I just keep wondering why this is called a liberal paper.
17
Reality: rate cut now is due to rate cuts in Europe
"...a rate cut at this moment in the cycle sends a signal: The current economy could be as good as it gets."
Honestly? That's the signal you get?
Because what I hear from the Fed, as from the rest of DC, is more like: "As the festering blob of corruption and greed that is the Republican party takes over government the Fed has fallen and, from this point forward, you had better ignore every economic report, every statistical account, every recommendation for the economic good of the country. Keep an eye on your wallet. Don't count on anything long term."
Here's the other prime take away: The closer we get to, say, an election, the wider the misinformation, the more blatant the manipulation of things like the prime rate just to make Donald look like the genius he never was. That man knows how to manipulate and destroy and...that's all there is.
There is no guarantee of privacy, or safety, in the US financial system, there is no security any more.
You wonder how a puppet like Powell, and so many others, can go home or to meetings or to class reunions or anywhere, their betrayal is so deep, their eager abandonment of personal integrity and professional ethics so blindingly obvious.
Yet, as you see, here is the New York Times again reporting as if its serious economics not a political kidnapping.
And, as always, thanks Mitch.
12
Probably this coming-soon recession and its buzzing sound all round news media is the best bet to defeat Trump.
Trump's popularity was and still is never even a decent one to make him win almost any election, despite of a good economy he basically inherited from Obama and then applied some deadly steroid to boost its performance. Now the positive effect of the steroid is almost gone and the aftereffects and side-affects are emerging quickly.
Trump basically relies on ignorance that fuel racial, religious, s-called "patriotic" segregation in "us" vs "them" rhetoric and his political base of mostly frustrated, ignorant and some shrewd, opportunist rich folks.
Let's see if the upcoming downturn of economy can do something to convince Trump's core vote bank and his rich supporters who are more interested to kill (if not done so already) the golden goose for short term financial benefit.
3
@bonku - I wish you were right, but Trump has been slowly making the Fed into his economic scapegoat for months. If there’s a crash, he’ll blame it on them, and his enthralled base may just believe him. This is always Trump’s strategy. He is always the “outsider,” being constrained by and righteously pushing against the old institutions, be it media, the justice system, social norms, whatever - which will always be to blame. The buck never stops with him. This is what it looks like to be governed by a narcissistic leader and a party of sycophantic enablers who seem immune to feeling shame.
2
"The only problem our economy has is the Fed" ... so says stable genius trump. Really? How about tariffs imposed willy nilly without fore thought? Or government shut downs over a wall that Mexico won’t pay for? Or a ballooning federal deficit because of tax cuts that aren’t paying for themselves? Or a complete dysfunction and utter chaos in the WH now aggravated even more by the deliberate reckless dismantling of national security? And the nonsensical tweeting about firing the chairman of the Federal Reserve doesn’t help either.
11
What's really shocking is the fact that the CBO project the Trump tax cuts have set this nation on a 30 year course of economic disaster, and House Republicans admit the federal government is not collecting revenue which was suppose to pay for the tax cuts. But the media spent all of 5 mins covering the economic disaster that "will" happen.
This administration has allowed "too big to fail" measures to lapse, allowed shady financial instruments similar to the subprime mortgage industry to grow again. I guarantee when our economy implodes again the media and politicians will all be scratching their heads wondering "how did we allow this to happen?".
9
@Don
Absolutely. Look no further than the proliferation of CLOs i.e. 'Collateralized Loan Obligations' to see the seeds of our next financial crisis.
If rates are cut, this is a ploy to shore up, artificially, the economy at a time of contraction in order to bolster Trump’s reelection hopes. This move puts into jeopardy future help in the face of market collapse. If the market were to collapse, bailouts will again assist the wealthy by giving them tax money from the bottom of the economic ladder. Just like the recent tax cuts, the rich will get richer on the backs of the poorer. The oligarchy will grow apart from the rest and become even more powerful.
7
Probably this coming-soon recession and its buzzing sound all round news media is the best bet to defeat Trump.
Trump's popularity was and still is never even a decent one to make him win almost any election, despite of a good economy he basically inherited from Obama and then applied some deadly steroid to boost its performance. It's like putting an otherwise healthy person in ICU and giving him all sorts of drugs and steroids.
Now the positive effect of those drugs/steroid is almost gone and the aftereffects and side-affects are emerging quickly.
Trump basically relies on ignorance that fuel racial, religious, so-called "patriotic" segregation culminating is the age old "us" vs "them" theme for his political base of mostly frustrated, ignorant and some shrewd, opportunist rich folks.
Let's see if the upcoming downturn of economy can do something to convince Trump's core vote bank and his rich supporters who are more interested to kill (if not done so already) the golden goose for short term financial benefit, to understand the reality and change its course.
7
"they acted too soon and too violently"
Trump describes carnage at the Fed.
Mid-west men won't vote for a woman.
Texas Trump loyalists takes over Intelligence and Justice just in time to hamper impeachment investigations And protect Trump from Epstein connection. Who was Maria and what happened to her? Her fate may be Jeffrey's only bargaining chip. Why can't Palm beach tapes be used? If 80% of the services surveilled involved sex with or provided by trafficked women, how are they over-reach? Reluctance of the women to testify should not negate warrant. Dead people don't cooperate either.
3
If you are at 2.5%, and you need to cut, despite "record low unemployment" and record stock markets, it tells you the government/Fed is either (1) completely corrupt and/or (2) the government has been lying to you, on their inflation, wage, and employment metrics and the great benefits of their tax cuts (for the rich). "The Greatest Economy in History" has always been a lie peddled by the Con, and he needs to keep the lie going until late 2020. Everyone, and I mean everyone, has rotted from the Trump cancer.
17
It's a mistake to cut rates now. Normal economic cycles occur on top of efforts to make economic growth go on -- so the politicians can claim credit for growth they had little to do with.
This growth has gone on longer than ever before, and a correction is in order. The longer we put it off, the worse it will be. With huge deficits and already low interest rates, fighting the next recession may be impossible.
Ending Trump's binge on tariffs may be the most constructive thing that can happen right now.
8
"The effect of Mr. Trump’s $1.5 trillion tax cut is waning and businesses report that they are holding off on expanding."
I said at the time that the tax cut was an expensive meth fix for the economy that wouldn't last. So it is. I don't see myself as an economic forecaster, but this was a no brainer.
12
I am against the rate cut by FED. I prefer the economy to take its natural course, not by artificial stimulation. If our economy is really bad that requires FED's rate cut, then I would say go ahead to cut the rate.
Trump has many cards to play before his reelection. Trade agreement with China is one in which he basically can dictate the ending date. China doesn't want trade war. Any time we say ok, China will sign it. It is just Trump who wants this and that to postpone the signing date in order to accommodate his reelection. Once it is signed, it will boost economy instantly.
Rate cut by FED is another card to play. Although it is artificial, it is still a boost to stock market in short term. But it will make many investors feel good. More importantly, it will add confidence to big institutional investors which Trump needs their support for his reelection. And rate cut can come in various dates and forms.
Lastly, Trump can agree to and rejoin Paris Climate Agreement in the last minute before voting date. News media will be preoccupied by his decision which will be free advertisement for him. He will dominate the news that his opponent has chance of none.
I think Trump will get reelected because he has too many cards to play.
1
An Era? Rates have been raised modestly the last few years after being essentially zero for almost a decade.
4
A rate cut now seems like giving extra crack to an addict. Another metaphor would be gilding the lily. yes, the stock market may get a short-term boost, but negative speculation is right around the corner as there is nowhere left to go in this overheated economy but down.
I suspect that the bears will begin emerging from their dens very soon.
6
rates never normalized after the great recession - president has been touting that the economy is doing great - all lower rates will accomplish is a pick up in inflation at this time - trump has never had a clue how markets work - hence the multiple bankruptcies - if the Fed cuts and inflation spikes and the economy - which DO NOT reach 3% GDP growth in 2018 - begins to slow and even tank - the nit wits that supported this move and jaw boned the Fed into lowering short term borrowing costs for no real reason - will have no one to blame but themselves for the recession that will almost certainly follow.
7
Some banks are already lowering interest rates. My online bank, which admittedly pays much higher interest rates than most other banks, has started reducing the interest rate on my savings account, and since I opened a CD in June, has lowered the rate for the same term by 0.20%.
3
If the Fed feels compelled to cut rates, then the underlying economy isn't as strong as Trump would have us believe.
5
When the economy crashes, the government will be all but powerless to do anything about it, even with a new Obama in charge to help. Taxes are already too low to support funding during the good times (record-setting deficits!), and the interest rate can only be cut so low. The good times are when you should have a budget surplus, and reasonable interest rates with enough buffer to lower them if the economy sours.
8
This interest rate stuff has become such a joke.
The interest rate on my primary credit card is above 16%, despite the fact that I pay off my full balance every month - and do not carry a penny of debt. These banks are robbing blind Americans forced to carry debt.
Furthermore, these artificially low interests rates do nothing but force Americans to put their money into the Wall Street casino, by making it impossible to receive any return on their investment in a bank. Sooner or later, that casino will enter a bear market, and everyone who has their 401ks, IRAs, or other retirement vehicle tied to the stock market will experience a truly frightening drop in their net worth.
These artificially low interest rates have also re-inflated our previous bubble in real estate, so much so that the entry level price of a home, condo, or co-op is even more astronomical than it was in 2007 - thus dramatically worsening the availability of affordable housing. And yet, when the next recession arrives, and job losses mount, we must again expect housing prices to plummet, foreclosures to become an epidemic, and calls for bailout to heard far and wide.
Is our current addiction to low interest rates any way to build a base of stable prosperity?
22
Who profits from low interest rates? Real estate developers, who love to finance speculative building projects through borrowing, with little or none of their own skin in the game. Enough said.
13
Several folks I've spoken with support Trump. They are quite well off i.e., they're probably in the upper one percent economically. The economy is doing well and so are they. For them it seems, little else matters. It may be that for people like these, the only event that will change their way of thinking is a significant drop in the economy that affects them. They seem oblivious to the fact that so many other people are struggling despite the economic numbers including the low unemployment rate or the ease with which people and families can be wiped out by a single medical problem.
46
@A Goldstein People that devoid of empathy and self-assessment will not change when the economy crashes. They will blame the crash on the "fake media" and others trying to bring down Trump, and then proceed to oppose all assistance for the needy. In short, deplorable.
1
If things are really so good, we don't need this now
The stock market will be goosed. Again. Is that needed? It is not a reflection of the economy, or the jobs market. It will not increase tax income to local or federal governments ( the GOP took care of that, guaranteeing deficits, with the 2017 Tax Bill).
This is meant to cover up Trump's interference n international trade, and missteps with allies. It appears to be being done to appease Trump & the GOP. It is a patch being applied to a leaky tire in advance of the 2020 election. It won't help for long, maybe just long enough to make Trump/GOP look better.
When the market does retreat; when there are continuing job problems related to layoffs, and the lack of good paying employment for millions - - the FED is going to have no monetary ammunition left. What then?
27
This simply benefits Trump. That is all this has to do with in cutting interest rates. He saves millions, the rest of us suffer with lower interest rates on our retirement and savings. Jerome Powell has finally succumbed to what Trump wanted, even though he said he wouldn't. They all fall in line sooner or later.
25
If others follow me (Start selling stocks for the cash I'll use in the downturn) then it will become a self-fulfilling market.
3
Our economy is not on solid footing. Obama left an improving economic climate which still showed signs of fragility. Trump's massive tax cut injected the economy with a quick jolt of adrenaline leaving a dire future outlook of humongous deficits. As is his nature, Trump wanted a quick, showy economic uptick rather than a plodding incrementally improving economy based on a solid foundation. His trade policies are yet to come home to a final roosting.
Trump's tried and true western farmer's base suffered from Trump's tariffs with China--so he goes the despised 'socialistic route ' of giving government money to pacify those hurt most. So much for 'heartland' independence.
Bottomline: this economy is manufactured for the now. It will fall to pieces eventually with a 'tump' herd around the world. SAD.
13
To be fair, all economies are manufactured.
1
@FJG Cheer Up! Some of the beneficiaries of Trump's farm tariff socialism were Brazilian billionaires and other foreign-owned conglomerates operating in our heart-land. We're sure Trump voters will see the sense in giving American tax dollars to foreigners who Don't cross the border. Or not?
1
@T. Rivers
for the "now"?
Want a better economy? It's doing the opposite of what Trump is doing on immigration and healthcare.
We shouldn't expect more than 2% growth, with employment growth about 1.2% since 2015 and productivity growth around 0.8%. We have to move those dials to increase growth sustainably.
Fed interest rate cuts when at full employment and $1 trillion deficits are indications we're not solving the underlying growth challenge:
Recall that GDP = Number of workers times output per worker. The latter factor is productivity.
If you want to increase the number of workers:
1. Expand immigration. Bring in more workers, particularly when you have 7+ million job openings slowing the economy.
2. Address men's disability and women's care-giving, the primary reason prime-aged people are out of the work force. Provide credits so families can afford day-care for example. Or expand Medicaid and the ACA to help men get their health back.
For productivity:
3. Corporations should be investing rather than doing stock buybacks, which should be taxed.
4. Corporations should be investing in training their work forces.
5. Government should be taxing the rich more so everyone can get a better education, whether college or trade school. Better healthcare also makes workers more productive.
29
It has been as good as it gets for years now but I keep returning 15-20% on my portfolios.
It was supposed to tank when Trump got elected, via Krugman's op-ed.
No one knows what the market will do. No one.
1
@Scott
We had a big year in 2017, but in 2018 the stock market was down. We only recently moved beyond the January 2018 peak. One would hope cutting corporate taxes by one-third would give a one-time boost to earnings, but we've moved sideways since.
Further, the stock market was up more under Obama at this time during his Presidency than Trump. And that despite the 30% drop right after Obama started; he recovered that and picked up 40% more for the comparable time window; Trump is up about 30%.
8
@Scott The stock market is the canary in the coal mine. It does not drive economies, it reacts to them, and if you know how to read the signs you can tell some things about what the economy is going to do ahead of the curve. It's one of a bunch of indicators and it's not even the most important one; stock markets crash because players don't understand the real indicators and end up rocked when the economy turns despite what the markets were doing.
And, the stock markets often get artificially propped up - usually before the "steroids" cause an overdose and the crash comes. We've seen that time and time again, usually because of Republican trickle down performance enhancing "drugs", leaving it for Democrats to come behind and work the country through rehab.
On the short term, no, it's difficult to know what the market will do. But long term? Or as a result of massive influences like war? Not that hard to know.
3
So without a blink Trump is robbing those with savings of the ability to at least keep up with inflation. Those who refuse to participate in the Wall Street casino have been punished for the past decade with interest rates below inflation. Get ready for another whipping from Trump and his billionaire friends.
36
All well and good until it isn’t. Just pencil it out. How much of our economy is vested in petroleum? Research dollars, drilling, transporting, production of oil/gas products, petro-chemical products, military security for oil producing countries, wars to control ownership of petroleum, massive trade deals that impact supply chains of petroleum/petroleum products/ billions in dark money spent to buy politicians to produce a system that supports a product that is a major player in the destruction of the universe. It may appear to be a booming economy now but the cost of putting so much of our money into this basket is a zero sum game. I would like to see the Fed run those numbers, Congress tell us the cost to our planet for every budget dollar spent.
7
Perfect timing!
Today happens to be the day when we earthfolk have consumed more from nature - water, soil, clean air, etc. - than our planet can renew in this entire year.
It's called Earth Overshoot Day, and it's arriving sooner every year. According to experts, Overshoot Day has moved up by two months over the past 20 years.
This movement forward represents a grand accomplishment for proponents of continual growth - e.g., the Fed - less so for those more concerned with preserving life as we know it.
24
Cutting interest rates in this economic environment is as irrational as our president (so-called). And why is the Fed poised to make these cuts? Because business investment is down. Remember all those statements about how the corporate tax cuts - made active just under 19 months ago - would stimulate business investment? It didn't happen. Not even a little bit. Instead, corporate America paid dividends, bought back stock and hoarded cash. Moreover, corporate America was already flush with capital when they were rewarded with a tax cut by a corrupt political party, the Republicans. Look at the balance sheets of those same companies today and they are still swimming in capital. A few, like GE, have so much capital parked offshore in tax shelters that they ran low on cash here in America. So now Jerome Powell thinks that cutting interest rates will stimulate investment, when free money didn't stimulate investment. The problem is that, if investment needs stimulation, it's not because capital isn't readily available and interests rates aren't already at historically low levels. No, it's because businesses have already reached their investment goals. If the economy is slowing due to a lack of biz investment (consumer spending is strong) this is a normal biz cycle: make plans, invest, watch it grow. Or, there's simply nothing to invest in. We're saturated. It happens. Chairman Powell should be ashamed of making these cuts. Sends a negative message. Shame.
16
Workers: “Um, hi, we haven’t seen real meaningful wage increases since the 1970s, and if we get sick, we have to empty our soul into a heart wrenching novel on GoFundMe and hope that other strangers who are also struggling might be doing just well enough to help us out with a few bucks. Can we please get compensation that ACTUALLY matches our contribution to corporate profits?”
Supposed big-brain economist who attended an elite university because their parents donated a couple million dollars to get their kid in: “Gee, why isn’t the economy stronger. My rich friends and I are doing so well! What could it possibly be? Our stocks are soaring. Things have never been better for us. So why aren’t things going better for the general economy? Perhaps what I need is a nice long retreat to my father’s multi-million dollar log cabin in Aspen and it’ll come to me.”
25
@Austin Ouellette
You actually think any of these people has ever spent even one second wondering about "the general economy", or any one who isn't them?
Honestly, I almost want Trump to get re-elected in 2020. Because the real consequence of Trump/GOP damage has not come yet. It is almost sure that this country will have a severe recession in next 6 years and I want all the Americans to see how Trump and GOP handle it. People in this country can only learn something from the real pain. If America can survive the Trump/GOP economic disaster, we will probably learn something and reemerge as a better nation.
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@Shell W.
We didn't seem to learn from Bush/Cheney crashing the economy, resulting in the 2008 meltdown. What makes you think we will learn anything next time?
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@Shell W.
I am beginning to agree. I’m doubting the recession will kick in for another year and I don’t want a democrat to eat this.
Flip the senate and keep the house. Let the president stay and burn his family to the ground. They should be working at Burger King. Entry level work fit for their majesties they see themselves as.
1
@Shell W.
I don't think even a recession will force people to see the truth about Trump. He is good at controlling the narrative and he seems to get away with it almost every time. He will spin it, and the truth will get lost in the fray.
Those who understand what Trump is about have understood it for years now. The rest I have no hope for.
1
Signals are contradictory but positive overall:
-> Employment high and holding steady.
-> Consumer sentiment good, spending lots of money.
-> Durable goods order bounced back.
-> Housing starts holding its ground.
-> But we yield curve inversion.
Why is the Fed cutting interbank rate?
NYTimes, please explain.
8
@Arthur Y Chan
I also agree. All the fundamentals fly in our face. NY Times report the truth. Trump has politicized the fed beyond anything we have seen before.
Isn't it just dandy that the Fed sets the value for the rock bottom rates at which banks borrow money, but then the banks set astronomically higher (and almost random) rates at which consumers borrow? Don't worry folks, while you are paying 8% on that student loan and 14% on that credit card, Bank of America gets to borrow money by the boatload at 2% interest. Socialism for the rich, capitalism for the rest of us.
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@Jim It's toothpaste economics: squeeze every last dollar from the bottom up
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@Jim
Try 25-40%, if you are really poor, or on your uppers. And some pay much more - 300-3000 percent for loan sharks.
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@Mountain Ape
LOL - Thanks, I needed that!
@Bob: THE economy isn't great for the majority of American's. And American workers? Our wages are stagnant, productivity is maxed out, and benefits have been cut while the cost of living has risen and the triple threat of housing, health, and college is iimmense. The winners in the post 2008 recession economy were already winning and this President and the 2017 Welfare for the Rich "tax law" has widened a gap that has created Gilded Age II.
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@Jon
Republicans are socialists for the rich.
The US economy is dead in the water, while we wait for the Trump years to end 6 (or 16) years from now. We are focused on fattening the portfolios of already fat cats, while pretending that climate change is not going to require a redirecting of our, and the global, economy.
We're doubling down on the wrong kinds of cars, trucks, etc. The wrong kinds of homes (and built environment generally). The wrong sources of energy. New money is pouring into stocks and bonds and real estate - the status quo of an economy which is not investing in the future and is, in the future, doomed. Even government policy - tax cuts, fed rate cuts - is committed to propping up this house of cards.
Eventually we will have to redirect our economic engine to deal with climate change. Capital will need to be invested in new technologies - in plants, equipment, transportation, homes... Workers will be needed to build new things. Consumers will need to buy new things. At that point, we'll have something approximating a real postwar boom.
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And we seniors will be long gone, dying in sadness over the deeds of Donald J. Trump, casting us aside as he has the college kids caught up in his schemes, the immigrants who worked for him even, his Cabinet members who couldn’t take it anymore, and everyone else thinkable, at his fingertips and twist of tongue.
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@Murray
Anyone who travels by car can see in what a poor condition the country is. It is rotting away.
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@Murray
A collateral cost of under-funding alternative energy sources is that very bright international students will opt for training in other countries besides the US. As a result, the international academic competitiveness of the US will slip as other countries with more prescient academic programs act as magnets to attract this talent.
With a population of about 330 million, or about 4.3% of the world's people, the US must recruit from a global population of about 7,600 million individuals. And, as national GDPs of developed, the US, in particular, and developing countries have converged over time, many of these very bright international students have opportunities at home and nearer home that were nonexistent, in even the recent past.
During WW II, and post-WWII through the Cold War, the US had natural political and economic recruiting advantages, that when this recruited attractive and attracted international talent merged with its abundant and well educated US work force, together they created a type of competitive advantage that lasted for decades.
[07/29/2019 Monday 11:34 pm Greenville NC]
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If Trump had targeted his vaunted tax cut to the middle class, we would be burning hot.
He targeted it to the super wealthy. We flamed out, and simmered down.
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@Paul McGlasson--I am middle class and my Federal income taxes decline noticeably, as did many others who paid Federal income taxes prior to the cuts.
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@Sendero Caribe
It all depends on how you define middle class and where you live. I too am middle class. My biweekly take home pay went up by $10 after the tax cut. So a total of $260 per year, but I got slammed on annual taxes and had to pay several thousand back for the first time ever. And I guess this is just me, but I really appreciate a functioning government that can provide services to its citizens, so I did not see the tax cuts as a positive. The slash and burn techniques employed by the GOP allow people a short term high, but in the long run it’s eviscerating America.
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@Sendero Caribe
I am middle class and my federal income taxes increased due to the “tax cut”.
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As a non-economist, just an ordinary consumer, counting on a non-politicized 'Fed' seems very important. Trouble is, having a brutus ignoramus in-chief trying to interfere in the essential need for 'Feds' independence , there is an element of unease as uncertainty leaves it's mark. Trump is, without a doubt, a royal disgrace for these United States.
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Oh, goody. This means that savings interest rates, including CD rates, will also drop. They were just starting to recover a little bit from 10 YEARS of low interest rates, and now they will start going back down. Think about it. Before the Great Recession, interest rates on savings accounts and CDs were 5% at least. They have never gotten anywhere near that in the intervening time, and were so extremely low for a long time that savings accounts were essentially electronic mattresses. Here we go again. I have long contended that those years of extremely low interest rates were the single most massive transfer of wealth from ordinary people to the wealthy -- ever. I would love to see some investigative reporting about that. Then again, it would be pretty depressing to realize how much money ordinary people have lost and will never regain.
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@JenD
After the economic crash of 2008, interest rates were dropped during the Obama administration to revive the housing market so that home buyers could afford mortgages. It was the correct action, although it is true that savers were penalized. Now, there is absolutely no justification for lowering them even further other than to buoy up artificial levels of the stock market. Jerome Powell is just is just another compromised Trump appointee.
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@JenD
Saving accounts are melting like ice cubes. After taxes on the interest as earned income, it is even less than putting it under a mattress.
Before Reagan people could earn a few $$ interests without paying taxes, it was not much but there was a social principle involved.
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@Alan J. Shaw Agree that it was probably needed at the time, but it's the length of time interest rates stayed so low that is astounding. There is no justification for savings interest rates under 1% for nearly 10 years, not during a so-called recovery. And my local bank still pays 0.25%! (No, I don't leave my money there.) Senior citizens were among the worst hurt, as they tend to place their money in safer instruments, like CDs and Treasury Bonds.
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This is a mistake. It will further enable risk takers to take bigger risk.
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@Tim
With our United States money we are in the hook for. They have so much money they don’t have to live here or suffer the consequences.
If the Fed lowers interest rates , they are not only doing their job, they are abetting the reckless monetary excesses of Trump.They are approving his enormous tax cut for the wealthy which did nothing to improve the economy.It increased the bottom line of his wealthy backers.If that money had gone to infrastructure improvement there might be more monetary growth today.The Fed is abetting Trump’s disastrous trade wars-they appear to approve of his endless threats to change the behavior of other countries by threatening them with tariffs.The Fed is losing power to help the economy in a real crisis-the rates can only go to zero-they are already historically low.The Fed is not doing their job now-they are compensating for Trump who only knows monetary excess and bankruptcy.
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The economy might be great but not for the average American holding multiple jobs making $10.00 an hour, paying home mortgages and student debt, living paycheck to paycheck to say the least. However, Wall Street, the rich and corporations are all flourishing and capitalizing at the expense of the country in the name of a great economy while the budget deficit is out of control and they profit from tremendous tax cuts…….thanks to Trump.
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The Fed is now kowtowing to Trump, who doesn’t get basic economic principles like inflation.
All he cares about is his 2020 campaign and being able to say the economy is growing. He counts on his base not understanding that the tax cuts for the rich and the Fed rate cuts were artificial boosts.
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@Barb Campbell
- and that they don't understand that growth gotten from jacking up the Federal government deficit is actually "growth" borrowed from our children.
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The photo on the screen in the photo accompanying the articles tells the story: the Fed has made President, who has intimidated Fed members, its client.
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It’s interesting how as a professional in a non-profit field I’ve never seen nor experienced this “great” economy.
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Donald Trump ordered the Federal Reserve Chairman to lower interest rates in order to help in his 2020 reelection campaign.
Whether or not that is the reason behind this move is not really relevant. The appearance of impropriety and weakness by the Federal Reserve is reality.
Trumpism is akin to socioeconomic political Stage 4 metastatic brain cancer of which Trump is thr.most visible symptom.
And the worrisome thing is that Donald Trump won the votes of 63 million Americans including 58% of the white voting majority who knew exactly who Donald Trump was and was not and voted accordingly.
Trump did not a covert stealth subtle campaign. Trump has many personal flaws. But camouflage, deception and trickery about his nature and nurture are not among them.
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Unquestionably, Trump manipulates the market to serve himself financially. Those tax cuts are indicative of the power and influence a most mischiveous man is in the helm.
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Seems to me the Fed has been cowed by Trump and become politicized. We are in the longest growth cycle in US history. Why in the world are they cutting rates now other than for short term political reasons?
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Seems odd to cut the rate when we’re not in a recession. My guess is the Trump administration has gotten to and corrupted the Fed just as everything else it touches.
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The FED has returned to its failed 1960's strategy of pegging interest rates. It didn't work then; it won't work now.
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Diane Swonk gets it, "we still have scars from the crisis." It could be argued that the Fed should never have initiated QT at all and the changes in rate policy are largely insignificant. At the mercy of the overall global equation. See Japan and Germany. Etc.
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So what will the Fed do when, not if, the next recession hits? Prior to all other recessions, the rates were 5% or better giving the Fed room to move.
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The economy is rigged. This should come as no surprise to anyone, as it is the role of the Fed to manipulate the economy to further its stability and growth. But it is done in such a way so as to primarily reward the wealthiest among us, those who have the means to invest in the stock market. Those with limited incomes who might wish to squirrel away some savings in a safer money market account or CD are left out in the cold. This is patently unfair. In a world of finite resources, saving should be encouraged. Unchecked consumption is neither healthy nor sustainable. The same is true for the gross economic inequality that exists in this country. Shouldn't Fed policy be designed to benefit the majority of Americans rather than just a wealthy few?
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Quote "The effect of Mr. Trump's $1.5 tax cut is waning" - most studies report that the tax cut had no to little effect upon business investment or wages for workers. Corporations used to them stock buybacks and rich paid less taxes.
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If the "kettle" is boiling nicely, why are you pouring gasoline on it? I am no Krugman, but this surely is only for short term gains. And when I see the rapid building in my town suddenly slow down or stop, it makes me wonder what is really going on.
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If the economy is doing so great why does Gulfstream Aerospace that makes the $70 million GVI, and desperately needs technical writers only offer the same wages as they paid me 10 years ago? They are completely mystified that they cannot find anyone to work for them.
My brother took a job in Waco, Tx rather that Savannah, Ga where Gulfstream is because of pay. I wouldn’t wish Waco on anyone.
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In the real world (that one that you and I live in) it really doesn't matter much what the Fed does -- the rate they set is the rate that banks pay to borrow money, not what you and I pay.
So even if they lowered it to zero, the banks would still keep the same rates to the public, therefore increasing their profits.
It has nothing to do with the general needs of the people of the nation - it has only to do with how much money the banks feel they can extract from us.
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This small cut means very little.
The bottom line is why is it being done.
If it is being done to placate the idea bankrupt, ego maniac demagogue Trump it's wrong.
It it is being done because the FED sees a small boost in the economy is needed then it is right.
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At what point will Republicans admit Trump is turning our government into his wannabe communist dictatorship? At what point will their supporters wake up to the realization they've been sold a big ole [wind] bag full of fake gold? When our deficit 2 trillion? 3-20 trillion on debt?
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@Independent American
They won't admit it until it stops benefiting them.
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@Independent American They will never admit it's that implies admitting they were wrong. Looking back in history, they will hold on to their beliefs to the bitter end.
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In 2018 it appears they raised rates for no real reason and now with the stock market at record highs and low unemployment they will lower rates. The Fed is incompetent. They were a major cause of the financial crisis in 2008 for when real estate was going up in value from 2005 to 2007 they were so
soow. to react. No one in their right mind would cut rates right now.
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Of all of the things the Fed can do to help real people, this is not it. It simply encourages more of the kind of investment that will not help people.
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Most advanced economies around the world seem to be dealing with aging populations, smaller family units, and waves of impoverished immigrant invasions - generating demand problems. So now it seems that the central banks of nations are more important for economic stability than actual domestic economic activity. Quantitative easing and lower interest rates are inserted by central banks when needed to keep the kettle boiling -- faux currencies dumped into faux economies. We live in a bizarre world, or am I getting everything wrong?.
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The Fed is Trump’s latest “get out of jail” card. In his previous “successful” business life Trump would mess up a business, then refuse to pay contractors or declare bankruptcy. Now, he starts trade wars, increases income inequities, balloons the deficit and begins massive stock buybacks. He harangues and bullies the Fed and has them bail him out. Unless someone stands up to Trump somewhere, we are headed off a political, social or economic cliff at a very high speed.
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Easy money will do nothing more than continue to fuel speculative "monopoly money" real estate housing markets in the DC, NYC Boston corridor and California "dreamin'. Do you really think that this is not "inflation." If you don't, examine health care prices, auto prices and stock prices. There is more to price stability than commodity prices these days. We are measuring the wrong things. In order to draw the conclusions that politicians desire. How does that usually end up?
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Trump’s continuing harangue with the Fed is similar to his hectoring nonsense during the Mueller investigation—
He should just keep his mouth shut, particularly since no one trusts or believes a word he says.
20
Utter hogwash: The Economy has NOY gotten better, and won’t. 99% of us are in precarious, part time, low wage, no benefit jobs that require 2 or more jobs just to avoid insolvency. The master demands lower interest rates because he is the master. The 1.5 Trillion$ giveaway helped those who didn’t need it. “ The Donors tax cut” I don’t know anyone who’s gotten a raise, we earn less than 20 years ago, and it will get worse. The dictator does what he wants, and probably won’t leave even if defeated. We are witnessing the end of our Democracy as a rot from within, as Lincoln predidicted
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The NYT could hardly be praying harder for a recession, even though a recession would be bad for america. Unfortunately or fortunately as the case may be, this Trumpian economy, being the best in history, couldn’t quit if it wanted to. This isn’t a “low energy” economy. Plenty of energy here thank you very much.
Let’s all say a prayer for our duly elected president who has delivered the best economic results across a multitude of dimensions in at least many decades! God bless the US economy, and god bless the American worker!
1
And you’re happy with trillion dollar budget deficits and a debt of $22 trillion? As Mitch McConnell has said, he wants to cut Medicare and Social Security. Hope you and other Trump supporters saved a ton for retirement, otherwise you’ll be in a world of hurt. But at least wealthy Republican donor got their budget busting $2 trillion tax cuts.
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@Bob
IN case you forgot, trump increased the federal deficit by 2.5 trillion and is now threatening to cut Medicare and SS.
But maybe you're rich enough to that you are willing to lose those.
The rest of us won't survive.
I know, not your concern.
4
What happened to Trump's "greatest economy is history"? This rate cut is beyond premature, ridiculous actually given how low rates currently stand, and is simply giving Trump and his billionaire friends a few more bucks.
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I also think the Democrats should temper their promises, since it requires a strong, steady economy, fair taxes paid by all social classes, and security based on good relationships with domestic workers and foreign allies to support and expand social programs like Medicare, Medicaid, and Social Security, not to mention critical infrastructure that Republicans never want to pay for. Tax cuts for the rich, sure. A bridge to nowhere. Oh, yes. Safe airplanes and water. Highways. Nah. Too boring. The Republican economy is essentially a Ponzi scheme that includes the retirement income of Americans as well as their children's futures. Do you think we will inherit a strong, steady economy in 2020 from the pants-on-fire Republicans? Don't bet on it.
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Why do I get the distinct feeling that as a nation we all have entered a Trump Casino?
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If Powell cuts rates now it is solely because of Trump's bullying. He'll basically be doing it to save his job. Trump is dictating policy at the Fed and nobody is standing up to him.
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Nice, it is always a good idea to hit the accelerator right before driving over the cliff, or into a wall.
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If we've learned anything about the Fed, it's there more to support the stock market than to maximizing employment and stabilize prices
18
It seems that Trump's arm twisting of the Fed is paying off. But stock market valuations are overly dependent on low interest rates, on top of a trillion dollars in corporate tax cuts that have been used to artificially bolster profitability (and executive compensation) via buybacks. The sugar high of the Trump tax cut has worn off.
This rate cut will artificially bolster the stock market and worsen the bond situation. There's too much money in equities because bonds produce relatively little. The vast majority of stock trading is based in computer algorithms which follow each other and exaggerate price movements. $80 billion went straight out of the market in December, in part because algorithms told people to sell. I suspect Trump could be manipulating the stock market to benefit him and his buddies due to the volatility that he creates with tweets.
A lot of risky companies are swimming in debt, so lenders have thrown money at them and spread these risky loans throughout the financial system. No one really knows where the bad loans are. If this continues, it's the housing market circa 2017 all over again.
Now we have a trillion-dollar deficit and nearly full employment. What happens to the deficit when the recession hits? Overall, it seems that it's not a matter of if a crash is coming, but when. Next month? Next year? Five years? I'm betting sooner rather than later.
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I agree. And I hope this economy. Lows up sooner rather than later. The longer it continues on an unsustainable course, the worse the inevitable crash will be.
It’s like a person abusing stimulants. Sure, the initial dopamine release feels great. But eventually the body can’t produce enough to compensate for the drug. Then the inevitable. And the longer you try to prolong the high, the worse the crash.
1
The economy did not grow 3.1 percent in the first quarter as you write in the article. Trump's bragging rights were downgraded, though that will not prevent him from bragging.
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The economy is NOT good.
The "upward wealth redistribution" (aka tax cut) bill of Dec 2017 has set the economy headed for the ditch again.
1) corps used the cut for stock buybacks, not investment and wages.
2) heavy borrowing to offset lost tax revenues
3) heavy borrowing injected (and still injects) billions into the economy
The $500 billion national sales/VAT (aka tariff) places a serious drag on the economy/GDP, which is two thirds consumer spending.
Repeal of the Volcker rule re-enabled proprietary trading, one of the key components of the GOP crash of 2008.
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Not to worry. Trump will lie about the economy and his supporters will believe. The GOP (greedy old P’s) will cover him.
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"The current economy could be as good as it gets."
That might be so, but it's really, really good right now for most workers. Granted wages still have anemic growth, but most folks I interact with in the work world are very busy.
It should be a warning to Democrats to start addressing this in some fashion. Not sure what they can do right now, but with interest rates likely being lowered, it's as the author states, the economy is slowing.
So how would Democratic candidates address this, i.e. what are their plans if we dip into a recession late next year?
10
My 23 year old college grad is living with 3 room mates in a small hugely expensive apartment in Boston. He has a good job, makes a decent salary but I don’t see how he’ll ever be able to afford to live on his own. The economy in Boston is booming but the cost of living makes it difficult for young people to get a foot in the door.
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@Pigenfrafyn Almost 40 years ago, my friends and I lived the same way in Boston. Eventually, we all left the city. Most left the area entirely. IMO, your son should consider moving too -- after he gets his experience.
3
@cherrylog754 well, as long as most folks you work with are busy then I guess things are great...
3
Trump will have no tricks left once the economy actually does slow down (it isn't right now). Can't have negative interest rates.
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@northeastsoccermum Actually you can. Europe and Japan did it during the last global slowdown. But it seems to equate to playing with fire, for sure.
1
And the economy is great for Trump and his family. They are making billions and they got a huge tax cut.
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@Louise
His businesses are not doing well and the corrupt Trump organization will likely collapse once he’s out of office.
13
@Louise
Trump says he doesn’t pay taxes. He says that makes him smart. So what does that make the rest of us who pay taxes on our income?
3
So much for Trump hollering he has had the best economy in the “history of this country” and all because of him as he says.
I was in NYC in September, 2008, when Times Square saw in lights the fall of Lehman Brothers, the message we all read from the street, heavy in the air. Henry Paulson was crying like a baby it seems.
I walked the trenches in a large hospital during the recession, as an RN Case Manager, when people had lost their healthcare insurance because they had suddenly lost their jobs. Hundreds, thousands, weeping they were going to lose their homes or their lives.
It was Barack Obama who turned the economy around. He had smart people working for him and diligent - and they stayed with him as things were bad, really bad, but the economy came around. As far as healthcare I remember one of the things they did was lower the amount of what people had to pay for Cobra to continue their healthcare insurance and extended people’s timeframe for receiving benefits like unemployment. Barack Obama stepped into a Republican made economic hornet’s nest, a demise for millions.
It would have been absolutely insane to even think about Donald Trump trying to handle any of that. His cabinet and advisors would have quickly come and gone, as they have now. He would have had no clue and he would never have had the stamina to bring this country around.
But yet, today, his followers clap and cheer anything he says. Unbelievable.
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@MIMA
Let's take the partisan glasses off, shall we?
We just printed money, money out of thin air, trillions of it along with Chinese and European central banks.
Even piece of garbage companies values took off because the money had to go somewhere.
If you or I counterfeit money, we would go to jail. If the central banks do it, they are called geniuses.
5
@MS: OK, let's take the partisan glasses off: who is it that always cuts taxes without cutting spending? TRILLIONS in tax cuts? Who puts decades-long wars on a credit card?
The Republican Party. They only talk about fiscal responsibility when the other party is in power. They were a party I voted for when I was young (pretty much 50/50), but now they have become extremists devoted only to the 0.1%.
36
@MS
Yes, and all those trillions "printed" did what terrible thing? Have you noticed that years later the inflation rate is below 2%? And that interest rates in Japan, which is has "printing" money for years and years, are actually negative -- namely, people and entities *pay* for the privilege of loaning Japan money?
That aside, you could have a good case against Obama, if you were willing to embrace the reality of what happened, rather than the fantasy of what you expected to happen. Namely, Obama bailed out the banks, rather than ordinary working people. The result was a very slow recovery, and slow growth.
Obama was great for the stock market, the "Knowledge Classes" who make money expressing opinions and the 1%, but C- at best for people who actually work for a living.
2
This would be a gift to stock shareholders, for whom it is already Christmas, and further widen the already large gap between rich and poor. I would think policymakers have better things to do than this, and I don't mean more tax cuts for the rich. Even those who will benefit know this is a political move, and not an economic necessity.
28
I’m glad inflation is below the target. I haven’t gotten a raise in 3 years, and my company made a $90,000,000 profit last year.
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Had Mr Trump directed that $1.5 trillion into infrastructure and research/development, things may have been somewhat different.....in the better direction.
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I am sorry, but if our economy is in such great shape we would not need a cut. There is something wrong when you have interest rates at historic lows and housing starts dropped six percent last month. We had a huge tax cut that did not give us 4% GDP. It did not increase wages significantly, and increased our debit from 19 trillion to 22 trillion. So you can see how people would be hesitant to buy anything with a large price tag, if you feel the economy is on the brink of slowing or worse. With trump in charge you can bet on one thing, KAOS
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