05-05-2025, 10:49 PM
(05-05-2025, 08:29 PM)SomeStupidName Wrote: 45 stars 34 flags
I agree July is going to be interesting, If the fed drops the rates and the trade deals are mostly done before then it could be incredible.
Rates can’t drop.
in the past, we’ve been able to drop rates because even in global troubles, nations and investors sought safety in US bonds.
Some theory floated about the US tariff policy was to shock the global markets, and force US interest rates down so we could effectively refi federal debt. What some failed to realize was in past financial crisis, the problem was global and people sought refuge in treasury bonds. But if we wage trade war against the world, some entities might sell bonds. So we don’t have the same flexibility to lower interest rates if there isn’t the same buy pressure against US debt.
Fractional reserve monetary policy means banks can loan out 10x from what is in their control. That’s all inflationary just like printing or quantitative easing. None of this is new, and presidents have tried to game the system to make their economies look good. That’s why we’re at where we are.
