Quote:
Originally Posted by Aces4
The only time rates were fiddled with so badly was the recession and covid. 7% isn't an artificially hiked rate. Prices are not going down, more have gone up and people are spending every like crazy. Watch what happens if rates are artificially depressed again. It's no wonder people don't bother saving money anymore, it pays peanuts for interest and their dollars are worth a lot less if they spend them later rather than sooner.
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The fed has two mandates,
stable prices (minimal inflation is considered stable)
full employment. .
So the fed is currently waiting to see:
1) if when the labor market weakens, to lower interest rates.
2) if when inflation rises, to raise interest rates.
Currently the dollar has weakened 10%, thus increasing imported good prices 10%, and tariffs have increased imported goods an uncertain amount, depending upon from which company the goods were sourced, and when . .
but neither labor nor inflation has moved significantly, so the fed is waiting for which one moves and by how much to make their decision on which way to go!
You have to look at both viewpoints, not just the most favorable one to your desired outcome. . and the fed is just waiting to see which movement overpowers the other. .
good luck to us, we need it!