re: Trump tells Fed to slash rates or he’ll end trade with countries with U.S. surpluses

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Just as economically illiterate as the Bernie Bros

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Looks like the fed is going to have to make a choice. Which one will it be?

Economists generally view halting trade with major deficit/surplus partners as significantly worse than the Fed cutting rates, because a forced trade embargo would trigger an unprecedented structural and economic shock, whereas a premature rate cut—while bad for inflation—operates within normal macroeconomic boundaries. To put it into perspective, economists usually evaluate the two outcomes through these lenses:

1. If the Fed Does Nothing and Trade Stops (The Worse Option)The Damage: Catastrophic and systemic. Halting trade with major partners (such as China, Mexico, the EU, Japan, and Canada) would instantly sever trillions of dollars in global commerce. The Result: Immediate, severe shortages of manufactured goods, electronics, automotive parts, and raw materials. Supply chains would break down completely, shutting down American factories, spiking unemployment in logistics and retail, and causing consumer prices to skyrocket due to extreme scarcity. It would risk plunging both the U.S. and global economies into a deep depression.

2. If the Fed Reacts with Lower Rates (The Bad, but Less Destructive Option)The Damage: Primarily inflationary and structurally unhealthy. If the Fed caves to political pressure and slashes rates despite a strong labor market and sticky inflation, it makes a major policy mistake. The Result: It would likely overheat the economy, weaken the U.S. dollar, and cause inflation to accelerate again. While high inflation hurts purchasing power and damages the Fed's long-term credibility, the underlying engine of the economy—global trade, corporate supply chains, and foreign investment—would still function.

While neither scenario is good, halting trade is orders of magnitude worse. A policy mistake by the Fed leads to painful inflation and financial instability, which can eventually be corrected over time. A sudden, government-mandated freeze on international trade would inflict immediate physical damage on the functioning of modern commerce, with fallout comparable to a severe economic war.

This will be another TACO moment

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It is the most blatant scam of history

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The Fed specifically?

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POTUS Trump is certainly getting their attention and they will fight like the dirty dogs they are to hold their position.

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POTUS Trump appointed 4 of the 7 members though.

Is that good?

The head guy does not make the final decision. I do appreciate his unwillingness to speak about direction. Jerome Powell is still on board which is very unusual.

How about we stop spending so much it creates $2+ trillion deficits. I like some things he’s trying to do but much of it can’t be accomplished alone. He has to reign in spending which really isn’t his MO. Lower rates will only exacerbate the problem at this point.

Just what we need. Higher inflation. Someone needs to teach him basic economics.

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Why a POTUS gets blamed for surplus or deficit budgets I will not ever understand. It is the Congress that controls spending.

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I realize the goal is to give Trump credit for every positive thing and blame every bad thing on deep, dark, evil forces that conspire against him but come on.

Do you really think that Trump didn’t push the BBB? Do you really think that Trump can’t veto the current CR that will guarantee a $2 trillion deficit for this year?

Are you really saying that Trump, who yall purport is the bestest deal-maker eva, can’t make a deal w/ congress to get our spending under control?

One day, I sincerely hope some of yall take the damn blinders off and rejoin reality here on planet earth.

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This is the answer but as we saw the other day our congress just passed another 2 trillion deficit budget.

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Trump still has to sign it to make it law