r/wallstreetbets • u/abishop717 • 1d ago

Discussion 5 rate cuts 😮

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u/superhappykid 1d ago

Nice, enjoy that 1.25% Rate cut when you buy your $1600 iphone.

-3

u/Cropitalist 1d ago

I’ll save $40k on a mortgage over a $300 markup on a phone every 4 years.

9

u/alchemist615 1d ago

That may be true ... But you forgot that all other prices will be going up 9-10%. If you think groceries are expensive now, just wait....

7

u/virtual_adam 1d ago

This isn’t Covid. No unlimited unemployment and federal government checks in the mail. No one is going to be fighting to pay $60k on a rav4.

It’s well known by now Covid inflation was powered by the government giving everyone plenty of money to spend. Inflation while people are broke will just mean things rotting on shelves, or companies cutting profit margins (which is why the market is crashing, no more 30% profit growth every quarter, imagine if companies just….broke even)

6

u/alchemist615 1d ago

The fed has the power to create whatever money they want. They can also purchase equities indefinitely. They can also Purchase government debt. The government then spends the money on whatever. Both activities inject cash into the economy.

They did it for YEARS after the great recession. Thankfully then, baseline inflation was low. Baseline inflation is higher now and tariffs are inflationary.

JPOW talks this afternoon so we may get a hint at what their plan is...