Posted on 05/28/2019 7:35:18 AM PDT by Moonman62
While speaking at a meeting of Japanese business leaders in Tokyo, Trump said the stock market would be anywhere between 7,000 to 10,000 points higher if the U.S. central bank had chosen to keep interest rates steady. He also suggested that the growth rate in the U.S. would have exceeded 3 percent.
"But they wanted to raise interest rates," he said. "You’ll explain that to me."
Trump, despite hand-picking Chairman Jerome Powell more than a year ago, has been a frequent critic of the Fed, often urging policymakers to cut interest rates from the current target range of 2.25 percent to 2.5 percent and blaming them for what he perceives as hurting economic growth.
“Our Federal Reserve has incessantly lifted interest rates, even though inflation is very low, and instituted a very big dose of quantitative tightening. We have the potential to go up like a rocket if we did some lowering of rates, like one point, and some quantitative easing,” Trump wrote in a series of tweets at the end of April.
Last year, the Fed hiked interest rates four times.
(Excerpt) Read more at foxbusiness.com ...
That last should be something people looking at retirement should carefully consider. At that point in your life, don't look at your current house's constantly rising value and rub your hands in glee, as the property taxes, at some point, may squeeze you out. We saw that happen in pre-Prop 10 California.
We faced that when values exploded in the last real estate boom, and at that time, Nevada didn't have any Prop-10 type of safety. We sold out, bought a manufactured home for cash in a nearby, rural area. We chose a manufactured home as traditionally, their value doesn't increase, which also means property taxes don't rise exponentially. Twelve years years, it is still working like a champ.
I’m sorry. You are just wrong. So wrong its not worth explaining it to you.
They did it anyway, the market fell 20%, the Fed reversed course and reduced rates in January, and the market recovered the losses by March.
He's warning them not to try that again going into the Presidential election.
- PJ
Japan has a negative interest rate. Maybe the President would want that?
If he wanted that he would say so.
I would like an interest rate that is line with the market as indicated by the yield curve.
I suppose you would consider Milton Friedman "just wrong" then. My posted opinion is a summary of his viewpoints on the cause of inflation.
Friedman was scathingly critical of "cost-push" theories as the driving cause of inflation. Friedman stated ,"The reason we have inflation in the United States, or for that matter, anywhere in the world is because these pieces of paper [currency] and the accompanying book entries, or their counterparts in other nations, are growing more rapidly than the quantity of goods and services produced".
Sounds right to me.
The primary driver of monetary expansion leading to potential inflation is loan issues which are unbacked by any real collateral. In the US this starts with bonded debts of the Government and gets amplified by the fractional reserve banking systems.
Higher interest rates do not reduce inflation and they do not cause inflation. They are a result of inflation.
Putting aside your misunderstanding of supply/demand elasticity, interest rates are set by the Federal Reserve. Top down controlled. Like in a Commie Country. Subjectively set based on their own goals. Not a side effect or a consequence.
Sounds like you took Econ 101 (Micro) as an undergrad and drank the Kool Aid.
Well, yes, I get that. Interest rates are set by a small group that has been delegated a monopoly control over them. The possibilities for abuse are almost unlimited.
The key discount rate is in effect an "off the top" commission that the central bankers take for their issuance of new currency (US Treasury Bonds). But changes in that base rate do not cause or prevent inflation. Changes do protect the central bankers from the effects of inflation. They are happy to cooperate with the US Treasury as long as they get their cut first.
What makes you so sure that I misunderstand supply/demand elasticity? I certainly remember the 1970's with rising interest rates, slumping economy, and rampant inflation. "Stagflation" it was called. The economists of the day thought that was impossible. They still maintain that it is impossible because it conflicts with the conventional explanations offered by the Federal Reserve.
Most of the explanations for inflation are designed to protect the people who benefit from it, and distract the potentially angry mobs who might otherwise object to it.
For that same reason, most of the suggested remedies for inflation are ineffective, self-serving,, or even destructive. ("Let's raise those loan interest rates again. But lets keep savings interest at effectively zero").
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