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42 sats \ 4 replies \ @Cje95 OP 31 Jul \ parent \ on: Divided Fed Holds Key Interest Rate Steady: First Since 1993 Two Gov. Dissent econ
I'm not sure how else to say it but no one in Washington DC actually thinks 2% is going to happen. I've talked about this here since I joined SN its a talking point but no one thinks its possible not in today's day and age with everything that has gone on the last 4 years.
Now should rates go to 0 again? No but clearly when looking at historical trends we are on the high side and could easily start moving back to 3.
I understand what you’re saying and I have had the same opinion.
What I’m saying is that it’s not a good reason to cut rates.
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We haven't had clear signs that we shouldn't cut them either though and to cut 25 basis points would have given the market a taste of cuts and the economy as a whole.
The debt is a huge issue everyone knows it and cutting the rate for the sake of the debt is a huge plus
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This is what I was saying. You're looking for reasons to cut rates, which is backwards monetary policy: i.e. a policy in search of a reason.
Cutting rates usually comes as a response to signs of the economy slowing down, when price inflation is at or below target. By your admission, none of that is the current situation.
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The status quo keeps things more expensive by making money more expensive. We are in an entirely different age then we were pre-pandemic and the old rules of thumb and ideas have been shown to not be nearly as affective as they once were.
Keeping loans and business creation more expensive chokes out small businesses and only gives the large corporations more power
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