Federal reserve facing uncertainty ahead of interest rate decision

The Federal Reserve sounded a lot more hawkish this week — meaning, members suddenly seem less amenable to interest rate cuts.

I explained in my last column how the Fed has been getting mixed signals from economic indicators and essentially is stuck at a three-way fork in the road: Raise rates as savers want, cut rates as banks and Wall Street prefer, or simply do nothing.

But there’s one other thing that the Fed is becoming more concerned with — the price of gold, which is booming.

Gold is where people put their money when the world gets too crazy and when it looks like central banks have lost control.

And the Fed doesn’t like a crazy world. That could be why several Fed officials pushed back against the market’s notion that a rate cut is inevitable.

The bigger problem with cutting rates is that lower borrowing costs haven’t been doing much to help the economy over the last decade.

You are going to hear the phrase “pushing on a string” a lot more if the Fed does cut rates and there is little economic impact.

Pushing on a string simply means that the Fed is helpless. And nobody likes to push on a string.

Credit: Source link

Written by Yaipoo


Leave a Reply

Your email address will not be published. Required fields are marked *





More Americans care about July 4th than US-China drama

nomas por eso vevo