Trump Pressures Powell to Cut Rates Amid Tariff Concerns

https://newscvg.com/coverage/business-economy/trump-pressures-powell-to-cut-rates-amid-tariff-concerns-X3RHGSHJT

by phupt26 • 1 year ago

5 1 1 year ago

jfengel• 1 year ago

Not going to happen.

Cutting rates increases inflation. You do it when you expect deflation. Tariffs will already increase prices. You don't increase them more just to artificially boost the GDP.

It might have been an option to cut rates instead of tariffs. That could have been applied to building the kinds manufacturing you want, though it would be better to do it in conjunction with mechanisms to encourage that. Just cutting rates increases the money supply everywhere, much of which goes into stock buybacks and stock-market inflation.

Tariffs are going to cause the economy to contract, and ordinarily that would cause the Fed to lower rates. But since you're already going to get higher prices, trying to inflate your way out of a recession is just going to make it worse for consumers. There is zero chance of Powell agreeing to that.

Trump Pressures Powell to Cut Rates Amid Tariff Concerns

Related Stories