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re: EU's Inflation is higher than ours, yet they lowered rates again a 7th time
Posted on 4/22/25 at 9:25 am to thunderbird1100
Posted on 4/22/25 at 9:25 am to thunderbird1100
quote:
Are we still going to ignore the fact that the same guy as head of the fed under the same president massively cut rates end of 2019/early 2020 (pre-covid) and make it all about Trump?
Not to mention cut the rate to zero pretty promptly after covid became a thing here as well, again under the same president.
Not to mention, it's the same guy who nominated him to the position.
0
Posted on 4/22/25 at 9:39 am to BCreed1
Powell might cut rates eventually if it seems like we can ever reasonably predict what Trump is going to do week to week
Posted on 4/22/25 at 10:01 am to BCreed1
quote:
So explain why Powell is refusing to cut rates?
It's really simple. He has lost control of the long end. After he lowered in Sept the 10yr yield INCREASED by 100 bips. If he lowers the front now the long end will take off on him again and he'll be forced into immediate yield curve control.
Once that happens it's over, any remaining credibility is gone and he'll have to buy it all in a QE spree that will make the covid debacle look tame.
Posted on 4/22/25 at 11:52 am to BCreed1
quote:This isn't obvious to me at all. Higher rates very clearly and directly provide by definition higher levels of coupon income.
Higher interest rates increase the cost of borrowing, reduce disposable income
Posted on 4/22/25 at 8:56 pm to BCreed1
quote:
So explain why Powell is refusing to cut rates?
Because the bond market hasn’t given him permission to cut rates, at least not yet.
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