r/wallstreetbets • u/abishop717 • 1d ago

Discussion 5 rate cuts 😮

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u/whitepepsi 1d 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.

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u/inquisitorthreefive 1d ago

Yeah, but that isn't going to happen.

So in an attempt to avoid a recession due to massive contraction of consumer spending, the FED is embracing inflationary monetary policy.

They all but had that soft landing nailed, but now there's some idiotstick doing donuts on their runway.

56

u/Taaai 1d ago

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.

22

u/inquisitorthreefive 1d ago

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.

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u/dqdg 1d ago

At least during a depression its easier to carry around a few coins for bread.