Markets expect 91% chance of Fed rate cut today, but next guest says easing is a mistake because inflation is well above target.
speaker1
speaker2
I think they are going to cut rates today. I think the Fed is wrong in its decision. The continuation of inflation is partly fiscal - we're running large budget deficits that will increase next year.
So you would get higher 10-year yield to lean against AI bubble and inflation by saying Fed won't keep cutting rates. What about small businesses and public who need lower rates?
speaker1
speaker2
If you want lower rates, government must lower its budget deficit. With expansionary fiscal policy and loose financial conditions from asset price run-up, system is awash in demand. Inflation is 1% above target, unemployment barely above target.
Confusing time with terrible consumer sentiment despite low gas prices, president talking affordability crisis while Fed talks lowering rates.
speaker1
speaker2
President has tool to make things more affordable - drop tariffs without congressional legislation. Part of why goods prices are up this year is tariffs.