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ProfessorGAC

(77,319 posts)

5. Spot On

Reply to Johonny (Reply #3)

Wed May 13, 2026, 04:39 PM

May 13

Yesterday, BLS reported annualized inflation of 3.8%. That makes this the worst time to cut rates.
It reduces the incentive to save, pushing more liquid money into a system with a fixed output, at least in the short term.
I'm not not normally am "x therefore y" guy when it comes to a complex system like the US economy. But, this is pretty cut & dried cause/effect.
Plus, the banks would apoplectic. Their whole short term tactical plan is based on interest rates making sense. A cut wouldn't make sense.
I'm not even sure it would stimulate real GDP growth to a meaningful degree.

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misanthrope

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Economics majors, I have a question [View all] misanthrope May 13 OP

The inflation caused by lowering interest rates is a tax. It eats your savings and paycheck. bucolic_frolic May 13 #1

This is a very interesting take. A HERETIC I AM May 13 #4

I think with the debt out of control and a reckless president spending our money like it grows on trees GoodRaisin May 13 #2

He is one of 12 votes. He cant single handedly Johonny May 13 #3

Spot On ProfessorGAC May 13 #5

Something else to consider. The FOMC and Fed Chair were created to be independent of political influence. It is okaawhatever May 13 #6

I worked Economics when I was in Army intelligence... jmowreader May 13 #7