Latest Breaking News

First I think they will do what is right as far as navigating the tight path between letting inflation get higher again (like it did first quarter of this year - my rolling 3 month graphs and month-to-month bar charts looked really scary back in April), vs. actually plunging us into a severe downturn or causing excessive economic pain jobs wise.

The situation back in April https://www.democraticunderground.com/10143231474#post1
e.g. PCE inflation --


Back to the latest. The Core PCE, their favored measure, is still 2.5% year-over-year and they are serious (in my opinion) about the 2.0% target, and I think they should be. The core CPI is 2.9% yoy.

Yes, I fully understand, and I fully realize, that I'm kind of an outlying naive, unsophisticated ring-ring-ring-a-ding-dong for thinking Jerome is actually trying to do the right thing, rather than doing everything in his power to bring on a pre-election recession.

(I get tired of pointing out that the FOMC committee makes the rate decision in a vote, it's not the nefarious Jerome who alone decides; but I realize the smartest people in the room types will point out that they're all part of the Trump-loving tax-cut-wishing oligarchy, sigh. Sometimes I just need to take time off)

I put little weight on the argument that they won't do 0.50% because it might scare the markets and scare consumers and business leaders too.

I am always amazed, always, at how much good people around these parts seem to think a 0.25% cut will do. Really, they think 0.25% is going to propel a pre-election nirvana of renewed economic and job growth? As opposed to what I think -- it will propel the stock market up for a couple of days.

If the Feds think a rate cut is the right thing to do, I think they might as well do one that has some chance of at least minutely affecting the economy. And not just something that will give the stock market a couple of big up days.

I notice, however, that a reason against a big rate cut is that RECENT inflation (i.e. 3 month average and month-to-month) is trending sharply down and is already well below 2%: The core PCE 3 month average is 1.7% annualized, and the core CPI 3 month average is 1.6% annualized. Graphs and the summary table of all 3 inflation measures are here for both regular headline measures "with everything" and for the core measures.

So that's another reason for me backing off on my earlier 0.50% rate cut projection.