re: Economy is recovering... Why lower rates?

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Economy is recovering... Why lower rates?

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For the same reasons discussed a dozen other times here in as many days.

High Fed Funds Rates add to the deficit and debt, both directly d/t borrow costs, and indirectly via slower economic growth.

We are $37T in debt. Interest (C-of-C) on that debt fluctuates with borrowing costs (treasury rates). Every 1% increase in our C-of-C on that total amounts to $370Billion/yr.

Here's an oversimplified version:
For FY25 our C-of-C has run about 3.2%. Unfortunately, approximately $9.2 trillion of outstanding marketable Treasuries will mature and require refinancing this year. With Fed Funds Rates now running 4.5% (1.3% about current borrowing costs), the Fed will tag taxpayers with an extra ~$100 Billion in additional deficit spending in FY26.

That's more or less just pissing away money.

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Heck think of how much we could save on future debt if we lowered it to zero!

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Trump 45 did. When rates were low, he wanted to attempt to restructure the debt with longer term notes. Media "experts" called him an idiot for raising the possibility.