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.
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u/inquisitorthreefive 23h 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.