Stephen Miran says rates should be below 3% by end of year and dismisses fears of US president’s tariffs stoking inflation
No wonder gold is soaring. Just gone over £2,800 here in the UK.
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We know his interest rate is. I wonder what Miran’s inflation goal is?
I think Trump knows sooner rather than later the unemployment rate is going to substantially rise. The FED is beginning to see that. Large numbers of unemployed will lead to deflation. Lower interest rates. Trump is right, but god bless your investments. Something has to.
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Atlanta Fed President Raphael Bostic said inflation concerns would make him hesitant for now to declare support for cutting rates again in October, even though economic risks have shifted in recent months toward greater worries about employment.
“The battle is over inflation vs. jobs.”
Yes. And another way of saying that is we are fast heading into stagflation, as journalist economists recently, and our own Wendy (a post quite some time ago I could not find) and others on this board have noted.
In terms of what to do, what to do…. Well, that probably depends on whether you are laser focused on winning the midterm elections or on the long term economic health of the nation.
My bet is that almost nothing substantial nor thoughtful will be done (there will be tons of shrieking), and that by November 2026 the fan will be spinning stinkingly.
Managing an economy with crux fiscal policy controlled by a Congress in deadlock is nasty stuff.
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Stagflation is the effort to raise interest rates to cut off severe inflation and see people laid off from jobs.
Right now, rates are coming down to ward off the coming deflation. BTW much of the rest of the world is getting deflation from China.
What will be impact of pending govt shutdown? Required compromise could mean higher deficit spending? Enough to increase borrowing and raise interest rates?
I think the minority will win and it will end after one or two weeks.
The ask is a renewal of the ACA subsidies which have a cost of something like $25 billion. I don’t think that amount creates a substantial increase to deficit spending nor to interest rates.
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I think the better question is - What does it mean that the administration has no plan in place for a government shutdown?
"Typically, agencies publicly post their "contingency plans” in advance of a potential shutdown that detail which workers would be furloughed and which would remain on the job. Large swaths of the federal workforce are exempted from shutdown furloughs due either to the nature of their jobs or because they are funded through means other than annual appropriations. Under existing guidance from the Office of Management and Budget dating back to the Obama administration, agencies are expected to update their plans at least every two years.
While not every agency complied with that mandate historically, the most recently updated plans were always made publicly available on OMB’s website. Earlier this year, OMB took down those plans. It has not yet restored them and OMB did not respond to multiple inquiries into their status."
All signs point to the administration ignoring the Antideficiency Act, just as they’ve ignored the Impoundment Control Act.
Who’s gonna stop them? Congress?
Long story short - I think we’re past the days when government shutdowns impact the economy and markets.
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Congress is hopeless and seems SCOTUS as well,
but if SCOTUS don’t stop him
the economy’s in hell. (sigh)
Shutdowns seem less important because Congress has always stepped in quickly as “emergency actions” and shutdown of all but most crucial stuff makes the public FURIOUS. That will happen or Trump will assert radically totalitarian powers of purse and printing press, and put SCOTUS to a really really tough test.
Or, how do you see it working out? Somehow?
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I dunno, I’m just flying by the seat of my pants. I’m often confused nowadays. Things that shook markets and the economy in the past barely register now.
I’ll be surprised if there is a shutdown. Not because of a last minute compromise, but rather because I expect a continuation of the status quo under TFG.
The current regime has already refused to spend money that has been appropriated by Congress. My money is on them continuing to spend money that hasn’t been appropriated by Congress. No shutdown.
Congress has already shown they’re incapable / unwilling to do their job and hold the executive accountable. Not trying to be doomy and gloomy, we’re well past that.
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….close to what I was mumbling when husband and I chose to move to Mexico.
However, I expect that if POTUS continues “to spend money that hasn’t been appropriated by Congress” then some congresscritter(s) will use Congressional status to appeal against POTUS to SCOTUS. I doubt that even this craven bought and paid for SCOTUS will stomach allowing the literal primary principle AND first article of our fiercely anti-tyrannical Constitution — Congressional Control of the Public Purse — to be composted for nothing.
And the moment that were to happen we would fall into a slow motion anarchy checked only by the more nimble States. Hmm. Where would you all move?
This popular song was partly brilliant auto-biography mixed with allusive history, but most also hear it as prophecy. Always worth a listen, but today maybe also a deep meditation.
I learned to dance from the Blusalis sisters on the street next to their hustling brother’s new blue chevrolet convertible playing Richy Valens ‘La Bamba” on the radio. When “the music died” later that winter I cried and cried and cried.
“I saw Satan laughing with delight.” Bye bye.
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Way off topic, but a little story for you … Back when god was a young woman and I was teaching at SUNY Albany and living in Niskayuna, we had a good friend travelling around the folk circuit who would occasionally play Cafe Lena in Saratoga Springs and he would stay with us when he did so. Hence the origin of the story. At the time Don McLean lived in Saratoga Springs and one night he came down to the bar where the folkies hung out and sang a new song he had just written. When he went home, he left the lyrics behind. One of his friends kept them and gave the to Don a couple days later when they met again. Supposedly Don had no memory of the song. You guessed it … American Pie.
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Wow. Wonderful story, and thanks for the telling.
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Medicaid is in the $1 tr area, right?
David,
$37 tr in debt, adding over $2 tr per year, and now rising unemployment that the FED sees so clearly, we are getting rate cuts as inflation rises. Because deflation will follow.
Deflation is more than a bogeyman.
We won’t raise corporate taxes. It is now too late. We are toast. It takes 2 years for corporations to build factories…depending on the industry, but ballpark 2 years. It is too late to solve or save. Primed, toasted, and roasted. Stick a fork in her.
The tax base is going to radically shrink. The debt will be unsustainable. Default. FDIC? We told them it would never work. No FDIC. Maybe no SS or Medicare.
We all know we are seeing insanity in the public arena.
On Thursday, Chicago Fed president Austan Goolsbee and Kansas City Fed president Jeff Schmid both expressed discomfort with aggressively cutting rates further due to concerns about inflation.
- there are others within the Fed who do sound more open to more reductions in the near term due to labor market weakness.*
San Francisco Fed president Mary Daly on Tuesday said it’s “likely” more interest rate cuts will be needed and that she “fully supported” the decision to lower rates by a quarter percentage point last week.
Interest rates do not appear too high for home buyers though.
The gain was surprising, given that elevated mortgage rates and high prices have kept many potential buyers on the sidelines. Economists surveyed by Reuters had projected a slowdown to 650,000 units.
Home buyers must feel home prices will be rising.
The median price of a new home sold in August was $413,500, up 4.7% from July and 1.9% higher than a year earlier.
Yes, that’s been the plan all along: Eliminate all the good that FDR put in place.
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Wall Street is starting to rethink the need for multiple rate cuts into 2026
Financial-market participants are scaling back slightly on their expectations for as many as five to seven interest-rate cuts by October 2026 following unexpectedly strong U.S. data on Thursday.
The U.S. economy is looking stronger than many people previously thought, which is giving way to a reconsideration by traders of how low interest rates might need to go into next year.
The one impact is, government data collection will be impaired and making it even more difficult for Fed to decide whether to hold or cut.
Fed has acknowledged tariff related inflation is still flowing through the economy, meaning the price raises are not done, and it will take some time, few more months, perhaps 2 Qtrs???
So Fed is not going to rush to raise rates.
@Hawkwin The current administration and specifically GOP has never really cared about fiscal discipline, it is an excuse to cut the funding for things they don’t like. They never waste a second when it comes to helping their billionaire masters. For ex: US treasury is trying to bail out the billionaires who invested in Argentina bonds, by directly intervening. Remember this administration is notoriously isolationist. There is one and only one reason they are intervening, that is to help the hedge fund bond holders. BTW, what is the initial cost of this intervention… $20 B.
So millions of US citizen losing health insurance is acceptable outcome to save $25 B but our dear hedge funds losing money is unacceptable so $20 B is not a big deal to save our friends.
@eldemonio It is not that they don’t have a plan, in fact, use the shutdown to fire the federal employees from agencies that they don’t like is the plan. Wherever Trump’s interests lie they will keep those employees working… I am not making this up.. this is the exact statement from White house. They have a plan in place and waiting for the shutdown.
@flyerboys Don’t count on it. Trump and his team desperately wants the shutdown. There is a reason why Schumer compromised last time, and this time he has too much internal heat to do. Trump will even use this as an example, and argue, we can run the country without all these people, let us fire them permanently.
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