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re: Why would the Fed lower the interest rate today?
Posted on 7/31/19 at 8:32 am to GumboPot
Posted on 7/31/19 at 8:32 am to GumboPot
quote:
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.
Interesting Gumbo. I read an article recently where chini subsidizing their exports to offset the tariffs was also allowing us to import deflation with the goods, keeping our own inflation in check.
Posted on 7/31/19 at 8:40 am to trinidadtiger
quote:
I read an article recently where chini subsidizing their exports to offset the tariffs was also allowing us to import deflation with the goods, keeping our own inflation in check.
Makes sense. This creates a high supply of goods which weighs on low side of inflation. But IMO the biggest factor keeping inflation in check is low energy prices. Fracking has really done wonders for our economy. For every fracking well you need 40 conventional wells. When these wells are produced the hydrocarbons need a home. We just have a shite ton of it now making gasoline, plastics (from ethylene via ethane), natural gas, electricity from natural gas, fertilizer from natural gas, heating from natural gas, other refined products from crude, propane, butane...the entire gamut from a fracking wells cheaper. It's a quiet energy revolution.
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