- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
Why would the Fed lower the interest rate today?
Posted on 7/31/19 at 7:16 am
Posted on 7/31/19 at 7:16 am
That's not my question but we only have so much title character space.
If the Fed lowers the borrowing rate of interest today, is this the first time a sitting President of the US made it happen, with a rebounding economy and good news all around it? Usually the opposite occurs.
Just thinking of the past where interest rates were high and higher, output was stagnant, inflation was problematic...
Other countries devalue their currency to spur what seems to be an upward economic growth motion for them?
I like it. I believe this type of economic change of course is extremely valuable. But, with economic growth comes the inevitable growth in government (for no good reason).
If the Fed lowers the borrowing rate of interest today, is this the first time a sitting President of the US made it happen, with a rebounding economy and good news all around it? Usually the opposite occurs.
Just thinking of the past where interest rates were high and higher, output was stagnant, inflation was problematic...
Other countries devalue their currency to spur what seems to be an upward economic growth motion for them?
I like it. I believe this type of economic change of course is extremely valuable. But, with economic growth comes the inevitable growth in government (for no good reason).
Posted on 7/31/19 at 7:23 am to BestBanker
There’s no good reason for the Fed to cut rates today.
Posted on 7/31/19 at 7:26 am to BestBanker
The only valid reason I’ve seen is so we don’t deviate too far from the European rates or money will flow here and the dollar will strengthen
Posted on 7/31/19 at 7:37 am to Mr.Perfect
quote:
The only valid reason I’ve seen is so we don’t deviate too far from the European rates or money will flow here and the dollar will strengthen
This is what I think and is a brilliant defensive move to challenge other countries to follow a more productive model for their people. I really think this is a brilliant move.
Has this ever happened before in our history?
Posted on 7/31/19 at 7:41 am to BestBanker
quote:
That's not my question but we only have so much title character space. If the Fed lowers the borrowing rate of interest today, is this the first time a sitting President of the US made it happen, with a rebounding economy and good news all around it? Usually the opposite occurs. Just thinking of the past where interest rates were high and higher, output was stagnant, inflation was problematic... Other countries devalue their currency to spur what seems to be an upward economic growth motion for them? I like it. I believe this type of economic change of course is extremely valuable. But, with economic growth comes the inevitable growth in government (for no good reason).
You are right, BB. Trump has pushed em' to lower Rates so that such will support a sustained growth in what should be a beginning, cyclical economic downturn. He did so in order to win the coming election.
Government IS going to grow, as High Tech affects the employment and the traditional, 'merit'-based economic model which allocates societal affluence. The People...ARE 'the Government'. To the degree that the People become desperate, they lose faith in Government to address their needs. And many who are willing and had marketable skills will end up desperate. That will change Government. We are experiencing the first reverberations of that change.
And we have two choice. We can talk, and find common moral and practical ground, and implement said Governmental Policy...or we can fight - with a lot dying off - and then talk and implement a Government which reflects the needs and desires (moral and practical) of the remaining Populous.
"The Fourth Turning" elucidates the cyclical aspect of the cultural/economic dynamic...but given today's monumental High Tech innovations...hardly envisions whether of not the next "Turning" will be as extraordinary as the transformative powers which Knowledge and High Tech will exert.
Bottom line. Ultimately...'money' won't matter. It's a means to an end. Knowledge will. And how our Human Family reacts to said Knowledge. The 'sky' is the limit. But the 'sky' is just as black...as it is blue. We'll see if Humanity makes it through the Fermi Paradox/"Great Filter"...or if we are found lacking...and filtered out.
Posted on 7/31/19 at 7:42 am to BestBanker
In addition, this could be an extremely historic event that we don't fully comprehend at this moment. This isn't cash for clunkers, guys and gals!
Posted on 7/31/19 at 7:45 am to RCDfan1950
I enjoyed your post. And true, we are the government and the governed simultaneously, and as the population grows so does the oversight system. It must, but, it also must be kept in check.
Posted on 7/31/19 at 7:47 am to Pvt Hudson
quote:
There’s no good reason for the Fed to cut rates today.
Your getting some attention.
Do you think that rates should only be cut when a negative approaches, or can it be utilized for a positive result?
Posted on 7/31/19 at 7:54 am to BestBanker
quote:
Why would the Fed lower the interest rate today?
1. Inflation is running below the 2% target rate.
2. Likely mostly due to other central banks (Europe and China) debasing their currency making ours stronger decreasing U.S. inflation (and high food and energy supply)...so the fed responds with a downward bias.
This post was edited on 7/31/19 at 8:06 am
Posted on 7/31/19 at 7:56 am to BestBanker
Being proactive instead of reactive. Usually they wait for a recession and lower rates. Instead they're lowering rates as soon as potential hazards appear (inverted yield curve, high PE ratios, etc.)
Posted on 7/31/19 at 7:57 am to BestBanker
Well if these IRRL letters i get 5 times a week drop from 3.25 to 2.85 I'll be taking advantage.
Posted on 7/31/19 at 8:01 am to BestBanker
quote:
BestBanker
You tell us pal!
Posted on 7/31/19 at 8:01 am to Mr.Perfect
quote:
The only valid reason I’ve seen is so we don’t deviate too far from the European rates or money will flow here and the dollar will strengthen
The other side of that equation is that exports and travel from regions that currently have central banks debasing will slow down.
So on one hand investment will flow from those counties to a stronger dollar on the other hand consumerism with the U.S. will slow from those countries.
IMO the feds goal is to strike a balance and the tools they use are first the fed's fund rate adjustments and if extreme measures are needed bond manipulation (through buying and selling depending on the goal).
This post was edited on 7/31/19 at 8:03 am
Posted on 7/31/19 at 8:02 am to Bestbank Tiger
You forgot to post through your BestBanker alter.
This post was edited on 7/31/19 at 8:03 am
Posted on 7/31/19 at 8:02 am to BestBanker
quote:
It must, but, it also must be kept in check.
I feel a lot more comfortable with an expanding economy and Trump winning the next election, and remaining in power to shape "keep in check" future Government, B. I know that the Dems (Transnational Progressives) are essentially so blinded by their moral-based Idealism...that their Policy is borderline delusional, if not pernicious and corrupt.
And I would be a fool to totally believe that "money don't matter", as the basis for our whole goods and services system. If money means food and security...it sure as hell does.
Posted on 7/31/19 at 8:05 am to RCDfan1950
quote:If you're going to quote from a book, at least reference it with a link.
RCDfan1950
Posted on 7/31/19 at 8:05 am to cwill
quote:
You tell us pal!
You need a test every now and then.
Posted on 7/31/19 at 8:07 am to BestBanker
Just as baseline - the Fed only “cuts” the overnight rate - and likely only .25%. Cuts and increases don’t happen in a vacuum - they are part of a strategic policy implementation and occur in sets of 3-5 movements in succession, typically every 6 weeks at the OMCM.
Rates should be cut to stimulate economic activity and growth. We currently have “full employment”, good GDP, political pressure to raise the minimum wage, and inflationary pressure looming from a trade war with China (they give us cheap goods and hold a significant amount of our debt).
We don’t have the need to cut rates now, and I fear it will have the reverse effect when the cut gets to market - creating inflation and increasing rates at the consumer level. It will slow housing and trickle down to the rest of the economy.
Rates should be cut to stimulate economic activity and growth. We currently have “full employment”, good GDP, political pressure to raise the minimum wage, and inflationary pressure looming from a trade war with China (they give us cheap goods and hold a significant amount of our debt).
We don’t have the need to cut rates now, and I fear it will have the reverse effect when the cut gets to market - creating inflation and increasing rates at the consumer level. It will slow housing and trickle down to the rest of the economy.
Posted on 7/31/19 at 8:09 am to Gusoline
No joke. I'm in the middle of an irrl and thinking of letting my rate lock expire the middle of this month
Posted on 7/31/19 at 8:11 am to BestBanker
The Fed allowed effective 0 rates to become normal and they raised them too early in the recovery and too much. They are now trying to repair the damage from their interference.
Popular
Back to top
Follow TigerDroppings for LSU Football News