From what I've been reading, ultimately the US economy, and others, is going to have to default or hyperinflate to reset to a manageable deficit. DOGE seems to be taking an axe to institutions with a liberal bias (NOAA, NFS) or in some cases to those which are already running efficiently (Social Security has very low overhead despite it being massively underfunded). Returning manufacturing can't happen fast enough to grow the economy nor can the government be cut enough to stem the deficit. And with proposed tax cuts and big spending proposals by Trump I don't see the logic (and sending everyone a $5,000 check for DOGE efficiency cuts, talk about oxymoronic). But Trump may be reckless enough to cause a global collapse which ultimately may be our way out of this, some sort of debt forgiveness that desperation can bring.
Yeah, so true. I think one of the real reasons he wants rates down is for financial repression to dissolve some of the debt. They can't say that though so they want it to look like they are doing the right things by cutting waste with DOGE and fixing trade deals.
Any thoughts on the idea that Trump is doing this intentionally to get the Fed to bring about lower rates during his term? Pressure on the economy means the Fed lowers rates, then he gets to refinance massive amount of bonds that are due at lower rates. This would benefit him for the rest of his term as generally lower rates lead to growth. Equities and other forms of risk capital then sky rocket
For sure Trump wants the Fed to lower rates to refinance federal debt at cheaper interest rates; however, if he is actually serious about reducing the trade deficit, this has the effect of raising rates (or at least upward pressure) for reasons discussed.
It's also one of those careful what you wish for things. If you look back, the Fed lowering rates typically only happens when the economy is cooked and stocks do horribly. This recession scenario is likely, in which case rates will fall because growth, the primary driver of rates, is falling. Recession does not look good, and I'm not sure he'll be able to successfully blame the previous administration.
From what I've been reading, ultimately the US economy, and others, is going to have to default or hyperinflate to reset to a manageable deficit. DOGE seems to be taking an axe to institutions with a liberal bias (NOAA, NFS) or in some cases to those which are already running efficiently (Social Security has very low overhead despite it being massively underfunded). Returning manufacturing can't happen fast enough to grow the economy nor can the government be cut enough to stem the deficit. And with proposed tax cuts and big spending proposals by Trump I don't see the logic (and sending everyone a $5,000 check for DOGE efficiency cuts, talk about oxymoronic). But Trump may be reckless enough to cause a global collapse which ultimately may be our way out of this, some sort of debt forgiveness that desperation can bring.
Yeah, so true. I think one of the real reasons he wants rates down is for financial repression to dissolve some of the debt. They can't say that though so they want it to look like they are doing the right things by cutting waste with DOGE and fixing trade deals.
Any thoughts on the idea that Trump is doing this intentionally to get the Fed to bring about lower rates during his term? Pressure on the economy means the Fed lowers rates, then he gets to refinance massive amount of bonds that are due at lower rates. This would benefit him for the rest of his term as generally lower rates lead to growth. Equities and other forms of risk capital then sky rocket
For sure Trump wants the Fed to lower rates to refinance federal debt at cheaper interest rates; however, if he is actually serious about reducing the trade deficit, this has the effect of raising rates (or at least upward pressure) for reasons discussed.
It's also one of those careful what you wish for things. If you look back, the Fed lowering rates typically only happens when the economy is cooked and stocks do horribly. This recession scenario is likely, in which case rates will fall because growth, the primary driver of rates, is falling. Recession does not look good, and I'm not sure he'll be able to successfully blame the previous administration.