if biden wasnt a sally he'd have pushed to jam rates through the roof to combat inflation and maybe avoid a recession. basically create a mini manmade recession to prevent a natural one. but instead we had free money for far too long and money printer went brrrrr. the modern obsession with avoiding a cyclical recession instead of managing it is crazy, it just makes the drops worse. 2008 all over again coming in the next few years imo.

I genuinely don’t think executive branch has much control over fed chair aside from appointing.

Regardless 550 fed funds rate Is overly tight when inflation is 3%. Near the roof as it were when the starting point this cycle was a fed funds rate of 0.

I wouldn’t rule out a recession yet. Especially if it’s just 25-50 and continue to wait and see, be data dependent blah blah . If this is 100 basis points of cuts over 12 months or 200 basis points of cuts over 18 months, these are two very different scenarios

Important to note the US did have a technical recession in 2022 (3rd quarter) that doesn’t get much press

This post was edited by Bazi on Sep 18 2024 07:13am

FED is suppose to be politically neutral.

So no President should say anything.

Trump was the last president that was fairly aggressive on his rhetoric about what fed should be doing. He chilled a bit the last 2 years but the initial 2 was non stop chatter on Twitter

Congress/senate has been quite annoying on the fed. Especially Warren with the whole “ WHY are you raising rates if you’re not 100% certain it can stop inflation and just cause job loss?!?!””””

So painful to listen to honestly

i think that 2022 rec was an overcorrection from the post covid bounceback. we just came back too hard. the rise from that march 2020 flash crash was legendary and unhealthy growth propped up on too few market makers.

given the relative factors i dont see how we can avoid a crash much longer unless they pump the economy with so much cash that the gains are outpaced by rapid inflation. covid spending 2.0 will be terrible so i hope they dont.

to be fair i listen to a lot of econ doom and gloomers, because with my limited exposure via just a roth TSM its not something i need to be dead accurate on. and im lucky to be in an industry thats fairly recession proof, as workers get pushed out the new orders we get offset a lot of losses from economic downturn.

Yes, Warren has always been loud. Especially at banks.

Trump told Powell to cut rates to help his real estate.

FED and Treasury should be neutral. Do what is best for the economy which helps all Americans.

U don’t need to avoid a recession. That is precisely what the soft landing scenario is which is looking for that unemployment rate to hit ~5% with dropping inflation and as a result likely stagnant gdp for an interim. Whether gdp is flat or modestly drops quarter to quarter doesn’t change much on the grand scheme and is largely just semantics. This scenario doesn’t require a crash. This is the base case scenario still with how quickly inflation has fallen since highs. The litmus test is going to be after the first 1-2 cuts, what does inflation start to do.

Say a 75 cent cut over the next 3 months to start 2025 at ~475 fed funds rate. With inflation currently around 3% does it drop further as we are still restrictive , does it stay flat, or does it start to increase. This is going to be the question that will determine where in the economic cycle we truly are. A drop or even flat would be fine but:






Agreed