That's "Doctor" Bonehead to you!
Posted on 09/11/2019 7:38:24 AM PDT by Leaning Right
President Donald Trump on Wednesday continued his verbal assault on the Federal Reserve, which he blames for slowing the economy, tweeting that the central bank should cut interest rates to zero or even set negative interest rates. The president also called Fed officials “boneheads” in the tweet.
(Excerpt) Read more at cnbc.com ...
Oh, and one more thing. Trump said that zero or negative interest rates would allow the US to refinance debt. Who the heck would buy a Treasury note paying zero percent?
Negative interest rates are the opposite of what you see in a strong economy.
CNBC?
That's "Doctor" Bonehead to you!
History shows a giant problem with this idea. It digs a hole that is more difficult to climb out of than taking the temporary hit of a business downturn and leaving interest rates in the area of historic norms. We will recover faster from a recession than from zero or negative interest rates.
Why? Saving is destroyed as are pensioners who depend on retirement investment or some portion of it having a sound fixed rate of return.
Germany is already there. Is it helping Germany? No.
Stop being logical and reasonable - it won't be well received.
CNBC?
Yeah, I know. Before posting the article I read it carefully to make sure there was no slant. Everything they reported there seems to be direct quotes from Trump.
I’m certain Trump knows this. I’m going to keep my powder dry. Perhaps a strategy of sorts.
Yeah, I read the tweets that were in the report by Trump. Trump obviously knows the pitfalls of zero interest rates. Time will tell why he’s saying this. Maybe he’s triggering here?
CDs? Are you serious? What are they paying 1% maybe 1.5% if you leave your money in them.
“Who the heck would buy a Treasury note paying zero percent?”
Someone not wanting to buy a bond paying negative interest? Lots of those in the EU btw.
But yes, it makes bonds less attractive.
And the USG can always monetize the debt like they did in 2009.
This is what socialism does to an economy. Don’t like it? Then reelect Trump and support a line-item veto for the budget.
I think he is merely applying maximum pressure on the Fed while moving the range of reasonability from leaving rates alone to cutting by more than 25 or 50 basis points. Powell now can cut more and still look reasonable as compared to Trump.
Instead of refinancing debt, we’d be much better off if we just stopped generating it.
> CDs? Are you serious? What are they paying 1% maybe 1.5% if you leave your money in them. <
That was my point. These low interest rates are crushing savers. And Trump wants the rates to go even lower. So what’s Grandma supposed to do? Just try to make ends meet with her pitiful CD interest? Or should she join the stock market crowd?
I dunno.
Trump wants to print money for free. Time to control the spending.
Yes this nonsense, but I suspect also that this is typical Trump negotiating strategy, or he is trying to get a reaction out of his critics that he can use against them later.
People buy negative interest bonds all over Europe and Asia. but we’re talking about people who need to park billions of dollars at a time.
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