General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsKrasnov Put Jerome Powell In A No Win Situation
The Fed wants to keep employment high and inflation low.
With Krasnov's tariffs, economists are predicting big time unemployment, near zero GDP, a recession.
With Krasnov's tariffs economists are predicting inflation somewhere between 3 - 5 percent, its goal to lower interest rates is 2%.
If Jerome raises interest rates he may help cause a recession. If he lowers interest rates he may cause inflation to rise to 5% which may help cause a recession.
Jerome has a 3rd choice, do nothing and ride this out.
We all know that Krasnov wants lower interest rates so I am guessing that's what Jerome will do.
I saw this bumper sticker today - ARE WE GREAT YET?
https://www.msn.com/en-us/money/markets/federal-reserve-is-unlikely-to-rescue-markets-and-economy-from-tariff-turmoil-anytime-soon/ar-AA1CfkfQ?ocid=msedgdhp&pc=HCTS&cvid=e1bd259ee2cb403897c0a9f6d204a813&ei=48

Lovie777
(18,110 posts)he’s one of smarter people unlike shithole and his fucked up administration.
cachukis
(3,110 posts)ananda
(31,537 posts)Really?
That is the understatement of the year right now.
iemanja
(55,863 posts)And he’s not afraid of Trump. He made clear he will not leave if Trump tries to fire him.
roamer65
(37,554 posts)An emergency cut and all hell will break loose.
Maybe 25 bps at next Fed mtg…maybe.
Bernardo de La Paz
(54,851 posts)Cutting rates means the dollar earns less so some money gets moved out of the dollar to other currencies.
At the top in February, there is some sense that the market was disappointed inflation was a bit stubborn and the fed wouldn't cut as much as hoped.
Now there is a possibility of substantial inflation, so a rate cut has become less likely in the short term (say six months).
roamer65
(37,554 posts)Markets will drop, like in 2008.
flamingdem
(40,373 posts)The damage will probably show later though