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Thursday, July 13, 2023

Dear FERAL Reserve: Cut Interest Rates NOW!

With inflation falling to 3% per the latest report, which is within the normal range for a growing economy, we can safely conclude that the war on inflation has been won.  The dragon may not have been slain, but it has largely gone back to sleep for the foreseeable future.  Supply chains seem to have long since fully recovered for the most part, while most of the inflation since then has been wanton "greedflation" by mega-corporations consolidating and rigging the game (and thus interest rates are the wrong tool for the job).  And potential recession and even deflation clouds seem to be gathering on the horizon as we speak.  Even if there is no recession, keeping interest rates too high for too long can paradoxically increase inflation in the long run, or one could get the two for one special, as Canada unfortunately learned the hard way in the 1980s.

So the FERAL Reserve really needs to stand down, stop raising rates, and start cutting rates yesterday.  Or at least no later than their next meeting. 

UPDATE:  The FERAL Reserve just raised rates again by 0.25%.  Mr. Powell seems to be really begging for a recession (or worse) with his tempting of fate!

1 comment:

  1. Inflation rates should come down. Higher inflation rates are hurting the working class and the middle class. A lot of the pent up demand for housing was due to speculators, wealthy foreigners and corporations buying up houses. Raising interest rates has made it impossible for many people in the working class and middle class to buy homes. Inflation should be looked at in a different manner. Instead of focusing on demand as a whole, what should be looked at is who is causing the demand. It will be then be seen that raising interest rates is far from the cure in helping the market.

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