adp non-farm report just came out. Much higher non-farm employment than predicted. We are screwed in term of rate cut. High unemployment and high core inflation gave jpowell easy excuse for pause rate and wait and see.
We'll see what actually happens.
I mean... they printed money when COVID hit to keep the US spending.
If this sell off starts triggering massive buying of off shore stocks due to unease in US stocks... they gotta do something to keep investors in US stocks.
Not to be a doomsayer, but with rising inflation (again) due to tariffs, probable layoffs due to reduced demand on american goods due to tariffs and combine that with high interest to fight the self-induced inflation, people will default, a lot. Even domesctically produced goods will be hit with inflation due to potash tariffs.
I’m seeing in my unqualified crystal ball, a depression happening.
What the end goal if you print more money for a bail out just continue kicking the can down the road. It’s like we’re building a dam that gets weaker each renovation and gets more water behind it. The longer you keep repairing it with tape and sticks the bigger the flood will be when it collapses. Let pain hit when it is supposed to hit rather than pushing it to the next generation double
What's going to replace it, a BRICS currency? The Euro?
I'm not denying there's pressure on the Petro Dollar and there are strong efforts to create an alternative, but all those alternatives are laughable, even conaidering the upheaval at the moment.
Humans love creaming doom and gloom, but it almost never come to pass.
But seriously, in what word do middle eastern countries trade crude in Euros, or Western countries trade crude in a currency backed by China or Russia?
Even if they were open to it, it would take much longer than any of Trump's emergency provisions will last.
Dude's gone completely off the rails, but you're catastrophizing if you think that transition will happen any time soon. The long view on this is still fine. That can change, but right now we have no clue how things will shape up.
EDIT: If Inwas a betting man (and I am, this is WSB), I'd say a lot of this will be challeneged and over turned by courts. And, at that point, I think the Trump admin will see it as a relief and a way to get out of a very bad position they've put themselves in.
You make compelling points. Hard to say. The administration has really married themselves to tariffs. Admitting a mistake of this magnitude is worse than the Afghanistan pullout. But yeah, the most optimistic end to this is the admin gives up on it sooner than later.
LOL, this has been the line for 30 years (since the 90s inflationary period). If you call for the fall of Rome every day for 600 years you'll eventually be right.
Current debt is completely fine. 1.3x your income is not that high actually. A couple with a new mortgage can be at like 600% of their income in debt and still not even be sub-prime, if they have a good job (the USA is like the guy with the best job of all, normally)
It WON'T be if we print trillions and trillions of dollars instead of just repealing stupid tariffs etc. and no longer "have a good job" anymroe in a depression, etc. But as of November 2024 under normal procedures and business as usual, it was not a meaningful threat at all.
The issue we face is even if tarriffs are repealed, other countries are not just going to be so willing to just jump right back into trading with the US. They are looking to trade with other countries because they know the US can just flip back to trade wars in a matter of years. We may very well never see the level of relative economic prosperity (relative doing a lot of lifting here because a lot of people are poor as shit here still) that the US has ever again. The Great Depression and Recession were bad, but the US did not cut off trade partners world wide during those periods. This is going to do what I believe is irreversible damage.
everyone said this during covid prints and then during post 2008 QE and by all accounts JPow was landing the plane in insane crosswinds and we were so close while coping with the pain after all of us pointed and said it was impossible.. then this happens.
Jpow was doing a great job it sucks that he doesn’t get to close his tenure the way it could have gone. If he pulled off the soft landing it would’ve been incredible. Now we’ll never know
What you are describing is called stagflation and from the massive global experiment that was the 70s oil crisis (cause by OPEC refusing to export oil, so not a bad comparison to now) the BEST way to handle it is thus:
The reserve bank handles the inflation
The government increases the safety nets
And the public get ready to be raped.
The nation's whose central bank and government ignoring inflation to keep people in jobs ended up having inflation accelerate to much, wages went backwards and since they still had no oil, unemployment STILL continued to rise.
So they achieved nothing but wasted money and made things worse.
The nation that ignored everything but inflation also faired poorly, but not as poorly.
The nations who saw that no amount of government money was going to stop a lack of oil from crushing the job market so instead focused on accepting the high unemployment and catching people as they fell did best.
It freed the central banks hand to do the bloody work that needed to be done and made sure the worst of the pain fell on those who still worked.
Now obviously the price hikes and supply issues will be caused by the tarriffs this time, instead of OPEC. But the outcome is the same. The reserve bank MUST follow what it learned in the 70s and if need be publically make it clear that the safety net is government responsibility.
Put would be my suggestion EXCEPT Trump is somewhat a coward. He cares what very particular people think of him.
(I am about to bend the no politics rule to its limit"
This is what separates him from Milei. Milei went in going, "This is going to hurt but needs to be done." and largely stayed the course.
If he hadn't been caught up in that Crypto bullshit, he would get 100% praise for turning Argentina around.
Trump has backed down on Tarriffs 3 times when it became clear that someone who has pull over him wasn't pleased.
Thus as the market continues to crash, Trump is more and more likely to go, "Nope, just kidding, 1 month delay."
This ultimately is worse because it means no stability. As we all know businesses want stability... so this instability will probably keep pushing the bear market...
But it will rally every time trump delays just enough to fuck your puts.
The reserve bank handles the inflation
The government increases the safety nets
And the public get ready to be raped.
Safety nets are only going to be for the people who don't need them. Remember when covid stimmies were printed, but more importantly, PPP loans? It was a massive handout to the rich in the trillions while the poor got maybe 2-3 months of rent.
Your last point is quite valid though. The poor are going to experience higher prices from the trade war, but even if those tarriffs are removed, those prices AREN'T coming back down.
That was nearly 20 years ago. There is no hard rebooting the economy. The entire economy is based around the federal government propping up loser businesses and insanely useless tech enterprises. There is no rebuilding this house of cards.
The government isn't propping up tech. Big Tech prints money to send to DC for DC to buy flyover state votes.
Everybody was all doom and gloom about tech when interest rates rose. No, Mag 7 became a thing and while non-tech companies stagnated you saw Apple bust past $3 trillion. Even in our "high" interest rate environment you see OpenAI reach $300 billion valuation without government nonsense like Farm Welfare.
The past 5 years has proven it. Interest rates up? Big Tech. Interest rates down? Big Tech.
It's not a computer you just restart and it works different. You have to actually have a coherent theory of macroeconomics that is supported by evidence in order to make good policy.
If they print more money dollar will nosedive. With these tariffs demand for USD will go down, add billions in quantitative easing and you are set for disaster.
Rising inflation due to tariffs leads to rate HIKES, if the goal was to cap inflation. Yeah we are going into a recession right now, one we caused on purpose, when our economy was in a delicate position and we had no room to absorb recovery measures.
This decision guarantees we are fucked. There is nothing left to do but watch it fall.
What potash tariffs are in place right now?
Canadian potash imports into the U.S. not covered by CUSMA are currently subject to 10 per cent tariffs and that is where they will remain for now.
I mean rate cuts won’t do shit to lower the cost of consumer goods or food stuffs so what point is there in lowering rates other than give the wealthy better deals when they buy up foreclosed property?
2.6k
u/CoughRock 1d ago
who's making these prediction for rate cut ? didn't jpowell explicitly said he's going to wait and see ?