Rates actually should be higher. Agree. Every time rates go up the first thing you hear is when are they going back down however when when rates were near 0% they stayed there for years without anyone questioning when they were going to rise....it was okay to keep rates at 0% but damn rates at 4% and its chaos every day on the streets with not one single day going by without an article written or a question on cnbc not being about rates cuts. Jat let it be and let the markets dictate the next rate decision.
Would be absolutely hilarious if Powell dropped them to 1% and the 10 yr skyrocketed to 5 or 6 or even 7%...dollar collapses and all hell breaks loose.
For Trump it's all about refinancing the US debt at lower rates. He will mention lower rates for first time home buyers and that's legitimate - but it's a political talking point to get support for rate cuts. If they roll over some of the $36T at a lower rate he can capture the interest savings projections as reducing the deficit while still cutting taxes... plus goosing the market and getting lots of fast growth - which would certainly lead to a bubble and a crash. But he gets credit for the party and is gone for the cleanup and fallout. Lots of studies have shown that super low rates are actually BAD for low income buyers. The reason being that rampant speculation, flipping and price appreciation due to frenzied competition serve to price them out moreso than in a higher rate environment where values are more stable and affordable. WSJ cited some work on this yesterday. I know it feels counterintuitive, like when the violent crime rate dropped hard in Florida after they let everyone carry concealed weapons. Sometimes reality isn't what simple logic would have predicted.
And the GDP report numbers were bizarre. Sure the result landed at 3% but imports were down 30%, exports were up 15% and domestic production dropped 15%. Any of these taken alone could signal a depression but the combination brought us to a slightly positive number. It's a complete sea change for so many businesses and one has to wonder if they are adjusting week to week to navigate the incredible uncertainty and how long that's sustainable. It also came to light that many are avoiding tariffs via free trade zones and bonded warehouses.
Who cares! We just focus on the chart uptrend - we long downtrend - we short no trend - no long, no short up and down and up and down and .... - long and short and long and short ....
Your remark is factually wrong. You are repeating false facts and assumptions from the talking heads. Therefore the contents of your post are a waste
GDP was 2 or 3% from 2010 to 2020, and interest rates were 0.25% So 1% is a very high interest rate for 3% GDP Need to go back to 0.25% really.
ET posters write like certain numbers and events are written in stone. "So 1% is a very high interest rate for 3% GDP." Logic is not your forte.
There is no rational reason for rates to be higher. There may be emotional reasons for yourself sure but the world doesn't operate to please you. Savers don't do anything for the economy you end up being like Japan for many years.