I don’t get this logic honestly. Those import tariffs will be incredibly inflationary and that inflation will materialise before the recession does. How would it make sense to start cutting rates into an inflation. It would be pouring gas into flame.
Because if spending drops too much things start getting DEflationary and that can wipe an economy. The fact that JPOW is willing to risk hyperinflation to avoid it should tell you how bad it is.
Lose lose. But they did not indicate how many cuts they are going to give this year and that their path has not really changed until they get more data.
Only when the economy is healthy. The economy will be so fucked that they will try to bring it back with low rates...inflation will come back once the economy recovers.
So, we had an internal economist give us a run down of what they were predicting at work. Essentially, it's higher inflation, higher unemployment, and they're expecting the fed to still cut rates to focus on their unemployment mandate and earmark the inflation as "transitory"
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u/whitepepsi 23h ago
Why would the fed cut rates?
The market can be fixed if Krasnov just dropped his tariffs. The fed cuts rates when the economy is in trouble and can’t be resolved by other means.
This is like me choking my neighbors dog and the police giving my neighbor another dog rather than just tasing me.