Current Events > so Trump wants to drop interest rate to 1%

(+) Yeah! (+)

LOL

https://www.msn.com/en-us/money/news/trump-pushes-fed-for-1-interest-rate-despite-economic-risks/vi-AA1K0HZF

Didnt he see what happened under Covid? Sure it sounds great, but that would make everyone with available capital to purchase as many assets as they can, ie "rich people buying ALL the houses" and making them way more unaffordable than they are.

Having a "Great economy" is not compatible with low rates.

There's a certain logic in that raising the rates is a direct cause of enshittification (e.g. everything now has to Actually Profit because the money isn't free)

However, that ship has sailed. Lowering rates will not un-shit things.

Nope.

CARRRNE_ASADA posted...

Didnt he see what happened under Covid? Sure it sounds great, but that would make everyone with available capital to purchase as many assets as they can, ie "rich people buying ALL the houses" and making them way more unaffordable than they are.

Having a "Great economy" is not compatible with low rates.

That's the idea

Great gonna get the house of my dreams then

Hexenherz posted...

Great gonna get the house of my dreams then

Yeah no. Home prices would immediately jump like $200k to compensate.

GENIUS! Why did no one else think of this? Are they stupid?!

CARRRNE_ASADA posted...

Didnt he see what happened under Covid? Sure it sounds great, but that would make everyone with available capital to purchase as many assets as they can, ie "rich people buying ALL the houses" and making them way more unaffordable than they are.

That's what they want. They don't want the masses to own anything of value. Just rent them in perpetuity.

Voidgolem posted...

There's a certain logic in that raising the rates is a direct cause of enshittification (e.g. everything now has to Actually Profit because the money isn't free)

However, that ship has sailed. Lowering rates will not un-shit things.

everything went up because the rates were low back in 2020 (well not soley because of this)

the certain logic here is that if rate becomes 1%
(it was 3.4%~ during 2020 fyi)

then easy money for the rich again, they can buy houses and flip super easy making home prices double again

they can hire tons of people on debt to make a.i. bs etc

your food gonna double again

sound fun?

yes it does suck that rates are high but it is a consequence of letting companies buy up all the housing and they did nothing to stop that yet

It would make things better in the short term and make things far worse in the long term.

creativerealms posted...

It would make things better in the short term and make things far worse in the long term.

So you are saying. Millionaires can finally break through the ceiling to the next level and billionaires can move up to trillion.

anyways even though I hated it back when Powell had the idea and made threads ranting about it

the point of the FED at these rates was to stop the easy money

as we see home sales sliding now, sellers are even delisting cause buyers are backing out

prices are falling

so the fire is cooling off, throw gasoline on it now?

and the FED idea was to cause unemployment which would reduce inflation at the expense of the regular person
a sucky idea but at the same time a better idea than just making inflation worse

the thing is the fed already had plans to cut rates this year. trump's tariff shenanigans threw a wrench in that. if trump really wants those rate cuts, he needs to **** off with his stupid tariffs already.

remember people say during covid era around 2020 there was a hiring boom for tech and that is why there has been mass layoffs every year straight?

this has to do with borrowing money and the low rate at the time

621 posted...

the thing is the fed already had plans to cut rates this year. trump's tariff shenanigans threw a wrench in that. if trump really wants those rate cuts, he needs to **** off with his stupid tariffs already.

cut rate means like .50 to make it like 6.1%

Trump wants it to be cut 5.75 points down to 1%

WingsOfGood posted...

cut rate means like .50 to make it like 6.1%

Trump wants it to be cut 5.75 points down to 1%

that, too. trump wants a way more drastic cut than what the fed planned.

Trump keeps pressing the "blow up the economy" button, and is wondering why its taking so long.

I think we can absorb negative rates. Set it at -1%, what's the worst that can happen?

Anony1125 posted...

I think we can absorb negative rates. Set it at -1%, what's the worst that can happen?

ahh yes PPP loans round 2

also a huge factor in the inflation explosion post covid era

Lmao, hope the Fed tells him to fuck off his whole term.

Bass posted...

Lmao, hope the Fed tells him to fuck off his whole term.

certain members are "reported" as breaking from Powell and want to drops rates but probably not by this much

then again these news reports could be lying to curry favor with Trump

WingsOfGood posted...

certain members are "reported" as breaking from Powell and want to drops rates but probably not by this much

then again these news reports could be lying to curry favor with Trump

I'm guessing the later. Trump can't touch them. If he could have, he would had fired all of them already.

Takuya_Lee posted...

I'm guessing the later. Trump can't touch them. If he could have, he would had fired all of them already.

why would he fire them if they want to lower rates?

but Powell is their boss

WingsOfGood posted...

why would he fire them if they want to lower rates?

but Powell is their boss

Just because he'd like them all to be the Fox News hot- level of Trumpians that he is installing in his second term. They vote internally on policy at the Fed. Even ones that he appointed(like Powell in the first place) probably aren't the level of sycophant he needs now. And then wanting to lower it half a point isn't extreme enough for him either.

WingsOfGood posted...

why would he fire them if they want to lower rates?

but Powell is their boss

Because they aren't giving him what he wants.

Well yeah, he's a moron.

WingsOfGood posted...

anyways even though I hated it back when Powell had the idea and made threads ranting about it

the point of the FED at these rates was to stop the easy money

as we see home sales sliding now, sellers are even delisting cause buyers are backing out

prices are falling

so the fire is cooling off, throw gasoline on it now?

and the FED idea was to cause unemployment which would reduce inflation at the expense of the regular person
a sucky idea but at the same time a better idea than just making inflation worse

You fundamentally
misunderstand what the Fed is doing.

WingsOfGood posted...

why would he fire them if they want to lower rates?

The board of governors cannot be fired by Powell anymore than by Trump.

CARRRNE_ASADA posted...

Didnt he see what happened under Covid? Sure it sounds great, but that would make everyone with available capital to purchase as many assets as they can, ie "rich people buying ALL the houses" and making them way more unaffordable than they are.

Having a "Great economy" is not compatible with low rates.

Geez, Donald Trump fighting to make his businesses more profitable? Shocker

even Trumps first presidency he fought with Powell over this every couple months,

I always felt there was never even a reason for it except Trump only wanting to feel control. Trump in almost any other department can fire people or change stuff except there. Even 8 years ago Trump kept telling Powell to change the numbers but he wouldnt. Every month or couple months hes always told him to change it to what he wants even if it made no sense.

Trump is the kind of moron that will tear away economic safeguards and sacrifice our future for marginal and fleeting gains in the present.

divot1338 posted...

You fundamentally
misunderstand what the Fed is doing.

Then explain it.

Can you?

Bass posted...

Lmao, hope the Fed tells him to fuck off his whole term.

So far they are. Which really angers Trump.

Trump will eventually get his way.

Fyi the FED themselves explained it

The point was to drive unemployment

Will divot provide an insightful counterargument or were they shitposting?
But benefit of the doubt stands for now

Diaper donnie does it again

WingsOfGood posted...

Fyi the FED themselves explained it

The point was to drive unemployment

Will divot provide an insightful counterargument or were they shitposting?
But benefit of the doubt stands for now

Higher interest rates -> more savings -> lower demand -> lower inflation.
The reason Internet rates were raised in the first place was to combat inflation. Unemployment and inflation have an inverse relationship in the short term. That we kept such high employment rates while stabilizing inflation to 3% was a miracle. If unemployment rates start going up, slightly lowering the interest rate could help without much effect on inflation. The fear with lowering it too fast is that it has an exponential effect on inflation, which actually drives unemployment in a longer timeframe. We want to avoid stagflation.
That's what I remember from AP econ, but this seems to line up: https://www.investopedia.com/articles/markets/081515/how-inflation-and-unemployment-are-related.asp

But, I don't know that anyone has massively increased tariffs while firing thousands of federal workers. I know the last time we tried massive tariffs it went terribly.

CARRRNE_ASADA posted...

Didnt he see what happened under Covid? Sure it sounds great, but that would make everyone with available capital to purchase as many assets as they can, ie "rich people buying ALL the houses" and making them way more unaffordable than they are.

If you wanted to explain why it's bad without making Trump want to do it more ...challenge failed.