I thought that Powell was talking about seven rate cuts this year:
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This is a possibility. My thinking two months ago it might be necessary.
Next year if we raise taxes on the wealthy interest rates can be dropped somewhat.
Rates will remain high. Even three drops as scheduled this year would be extreme.
Nope Powell has stipulated that he would follow the data. It’s all the other clowns that have been trying to guess what he is going to do that are wrong.
Andy
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The data is ticking upward.
I’ve been thinking this. While the [possibility seems remote, I’d guess that if another two months of data comes in hotter than expected the Fed will kick it up a quarter point or two just to be heard.
That said, the housing market is skidding to a halt as we speak, there are other indicators that the high rates are slowing things down even as there are others that aren’t showing it. I’d say the next couple months is key.
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Only economies of scale solve the inflationary trends. We will see them coming into play in the 2H24.
Supply solves inflation, not economies of scale. Economies of scale increases margin, but if there are only limited players and the supply and demand is tight, it doesn’t result in price coming down or reduce inflation.
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Data dependent is fine, but it also leaves Fed behind the curve. Separately, housing, insurance and used car prices are keeping the inflation up and almost all other categories are down. I am not sure how long they can keep the rates where they are because the real rates are now slightly above 2.5%.
I think FED is prisoner’s of their “data dependent” words.
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You have it completely backward.
Economies of scale in demand-side economics is supply based from our factory buildout.
Denying economies of scale as you just did is supply-side economics where there are fewer suppliers.
Economics be like double entry accounting and worse.
It is actually shocking how few people understand economics.
The misunderstanding is what happens over time.
The better the margins for American-made products the more players come into the market. This drives prices down. Contracts are signed by factories with utilities. This means utilities can plan and be more efficient. The contracts are hardwon which drives prices for energy down.
Along with the factory buildout is government monies for the grid and infrastructure that build efficiencies into our economy.
Supply-side economics is a type of economic ignorance. People are led through sheer lies. It does not mean there is a better supply of products. There is not more competition. There are not lower prices on goods.
Gasoline in 2018 real USD, inflation-adjusted, was higher than today. The political games are exactly the fatheaded liars that you need to be wary of.