The Spin Meister
Active member
Kevin Warsh, rumored to be next Fed Head, takes Andrew Sorkin to school…,
Great CNBC interview about the Fed
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The Spin Meister
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Yes. He said ‘regime change’ and ‘Powell and his boys’ several times
I think the Fed likes to keep interest rates high as long as the economy is doing well. That way they have more room to cut rates at a later date if the economy turns south. My problem is that high interest rates don't just hurt the private sector. They cause interest expense on the federal debt to be higher than necessary.
This piece is both history and opinion. Most Jekyll Island 1913 articles are similar. Some pro, some con. FWIW.
LudicrousSpeedGO!
Active member
Except when a Democrat is in office.
I mean your thought makes sense when a R is in office. But look at what the fed has done recently.
1) Jumbo cut a few months prior to the last election while inflation was where it is today. Extremely dovish but now inexplicably switched to hawkish.
2) Refused to raise rates for a year and a half of runaway inflation under Biden until after we hit a 40-year high inflation over 8% and inflation continued until over 9%. On top of this, they toted the Biden admin "transitory" lie the entire time. Massively dovish, like against all economic theory.
3) Raised rates 7 times when Trump took office including twice when inflation was below their 2% target and leading into mid-term elections. Inexplicably hawkish from the same group that was extremely dovish under Ds.
4) Kept rates near zero for the entire Obama admin except the very end and after Trump was already elected. This was the longest period of sugar high in our nation's history.
The entire argument of the FED not cutting now is completely devoid of any recent historical context. It's like they think that we have no knowledge of the decisions that they've made over the last couple of decades. Meanwhile, the housing market is headed towards a cliff with gridlock due to high rates (as if we've forgotten what happened just 16 years ago).
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The Spin Meister
Active member
And that rate manipulation was amplified by gaming the money supply by either quantitative easing or tightening.
Powell has been terrible and Yellon made it worse. Some difficult days ahead.
Yellen financed the ever increasing debt with short term notes in order to minimize interest expense. Now those notes are maturing and Bessent will have to borrow more at higher rates. The media will blame Trump.
1) I agree that the Fed lowered rates when inflation was higher. I guess their justification was that inflation was coming down. It doesn't seem to be coming down anymore but it's also not going up.
2) The fed argued that inflation under Biden was transitory and that's why they didn't raise rates for quite a while. Of course and tariff related inflation would also be transitory.
3) I think they raised rates 7 times under Trump because they wanted to be able to cut rates if/when things softened. The Fed has always acted like that.
4) Yes but Trump enjoyed extremely low rates for a while too.
Remember 2 things. One is that Trump appointed Powell. The other is that 8 people vote on rates. Replacing Powell might not change their consensus opinion.
The Fed has important functions like regulating banks but the amount of time and media hoopla given each month to a group of people deciding on whether the Fed rate should be 4.3% or 4.1% is ridiculous. That meeting should take about 5 minutes but instead it's turned into a very expensive soiree where elites gather to flaunt their importance. JMO.
