Inflation down to 2.3%. Why hasn't the Fed dropped rates?

You know why - because it is Trump

Because frick the common US citizen that's why.

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it's time to audit the FED.

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‘Not so fast my friend.”

- any one of our Marxist district court judges

Because dropping rates would cause the economy to burn hot again due to increased demand... Causing increased inflation again...

Has public education rarely failed this bad that people don't understand basic economics?

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Because dropping rates would cause the economy to burn hot again due to increased demand... Causing increased inflation again...

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Right. I don't get it. Why would we want to reverse course on what is taming inflation just to immediately cause it to go up again?

Target is sub 2% not 2.3%. Also, this bs calculation has been manipulated to hell to make it look better than it actually is compared to historical numbers. It’s not a Trump thing, Biden did it too.

Further, one data point st 2.3% doesn’t mean you are at the right position to make the change. You need to prove it’s stabilized st or below your target.

Do what you are saying and you will likely boost inflation back up. But yeah, let’s ignore common sense to try and make Trump look better and some of you to save a bit of money in the very short-term.

I don't think people understand how rates are "lowered" and why lowering them is inflationary. Here is an oversimplification of the process.

The NY Fed buys Treasuries from banks for higher prices than what they are currently selling for in order to push the bond yields down (the more expensive a bond, the lower the yield/interest rate). When bond yields are lower, it pushes banks to seek higher yield by loaning out to people in search of higher yields. The lower the yield on bonds the more competitive the loan rates become.

The problem is that when the Fed purchases these bonds, they do it by "printing" more money (they actually hit a few keys in a computer and it moves the money into the selling banks Fed Reserve account). This adds more money into the financial system and is inflationary by nature.

The Fed holds these Treasuries and MBS on their balance sheet and let's them mature and roll off. These held securities are what people are referring to when saying the Fed's Balance sheet is at $7 Trillion.

If they want the raise rates, they sell them for less than the current market price to push the yields upwards. This in affect tightens the money supply because banks would rather take the now higher yield of risk free Treasuries than make risking loans.


If anyone wants to learn the in and outs of the Fed, I recommend the book "The Lord's of Easy Money". It explains the entire process and gives the history and politics behind it all in an entertaining and accessible way.

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Panicans said tariffs would cause massive inflation Guess it’ll be next month before it hits

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Are any of the new tariffs actually in effect and being collected?

It’s tough to keep up as it the tariff landscape changes every 6 hours or so.

Fed isn't going to drop rates until Trump stops with the weekly flip flopping of Tariffs.

Its not unreasonable for them to want some clarity. I know its not what the cult wants to hear but its actually sound policy.

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Panicans said tariffs would cause massive inflation


Guess it’ll be next month before it hits

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