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😂😂 we were told last year the FED INCREASING interest rates was going to cause a recession. Today, we are told FALLING interest rates are signaling a coming recession. At some point the press will "?learn?" economics. A lower interest rate will spur increased economic activity.
Increased activity on such things as investment, home mortgages, autos, credit in general. As with everything it depends on the context. Increasing rates in a booming economy is natural. If they increase too fast it could stifle the growth. That was the danger with the FED.
The rate of increase last year was too much not the rate itself. The same can be said for decreasing rates. It doesn't tell you anything in and of itself. Is the decrease due to underlying fundamentals or a narrative based on fear? Is the rate of decrease too fast or too slow?
At the moment most of the decrease in rates is due to fear pushed by the fake media about the impacts of tariffs and thus slower growth. The underlying fundamentals like consumer confidence, unemployment, lack of inflation etc is signaling a strong economy.
It's hard to tell what will happen in the future and emotions tend to get in the way of sound decisions. People have been told for decades tariffs are bad. This ingrained talking point makes it easier for the fake media to whip up fear and thus a flight to safety into bonds.
The fear at this time has zero basis in reality. The economy is good, growth is good, prices are stable. Sometimes, fear can be self full filling and that is the only question out there at the moment. Will the fear pushed by the fake media cause a recession despite the numbers?
Idk that answer. It has happened before, it could happen again. I tend to think it will not, because the fear is unfounded. The fake media wants a recession so it will continue to report as if one is happening no matter the actual numbers. So far they have failed.
IMO the falling rates will be in effect a rate cut that will spur the economy and stop any slide or softness since the economy is firing on all cylinders much like a fall in gasoline prices at this stage will mean greater future economic activity.
If the FED follows and acknowledges reality of the bond market and cuts it's rate to match that will spur even more activity. Giving a positive feedback loop instead of a negative fear loop. Place your bets.
