Submitted 1 month ago by unconfirmedsourcesDOTgov@lemmy.sdf.org to economics@lemmy.world
https://www.nytimes.com/live/2024/09/18/business/fed-interest-rates
I was expecting a conservative quarter point reduction, but it seems like the Fed is feeling bullish about inflation and concerned with the labor market, which has cooled much faster than was previously predicted.
What do you think? Will this move come with the positive effects while keeping inflation below 3%?
Fed is confident the crushed wage growth and haven’t hurt companies too bad in the process so they can free up the money again.
That is good to hear. Means the inflation rates are probably more under control and lending can be cheaper now.
Oh I hope this lasts through October so I can refi my home loan. 🤞
time for a recession
whyrat@lemmy.world 1 month ago
Larger cut than I think was appropriate at this time. Employment is cooling, but still positive. I wonder if some of the unpublished leading indicators show a more bearish picture…
unconfirmedsourcesDOTgov@lemmy.sdf.org 1 month ago
I was surprised that they went for half a point; I expected a quarter. Are you concerned that we could see another spike in inflation?
Anecdotally, I’ve seen a lot of friction in the job market over the last year, so hopefully this is the signal that the market has been waiting for to green light some of the projects that have been getting put on hold due to “economic conditions”.
whyrat@lemmy.world 1 month ago
Inflation risk is more likely from a US China trade war or conflict escalations in eastern Europe or the middle east. The interest rate was a pretty blunt instrument to combat COVID induced inflation; but it’s the only one the Fed has.
I’m concerned the stock markets are already overvalued; up 17% YTD over 85% on a 5 year mark… that’s borderline bubble; throwing more cheap money at it isn’t what we need at the moment; a more cautious return to lower rates is called for in my opinion. Give the markets time to digest and use the meeting minutes to signal likely further declines.