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Prudent move? It's the only move. If it's either that or a recession, then they will do it, consequences be damned.
by heartbeats 7y ago
Prudent move? It's the only move. If it's either that or a recession, then they will do it, consequences be damned.
- A4ET8a8uTh0 7y agoI disagree. You can maybe delay the inevitable correction, but it is going to come. And after the sugar rush of easy credit ends, the headache will be that much worse. Would it not be better to face some of that pain now?
- psadri 7y agoNot in an election year.
- coliveira 7y agoTrump will not let the recession occur, because he's so afraid of losing.
- A4ET8a8uTh0 7y agoMaybe that is part of the problem. We imbue our leaders with a belief that their will alone is sufficient to stem the tide forgetting that they are only human.
- AnimalMuppet 7y agoThis is the point of the Fed being independent - so that they can ignore Trump's tweets and do what they think the economy actually needs. Now, they have recently done basically what Trump asks. Are they succumbing to Trump's pressure, or is Trump asking them to do what actually is the right thing?
- coliveira 7y agoThey are independent, but not imune to pressure from a powerful person who doesn't recognize any boundaries to achieve his personal goals.
- heartbeats 7y agoSure, but it's also a matter of when. If you can delay it for a few decades, that's going to be enough for a lot of people to retire. The US could just cut interest rates whenever the stock market goes down. There's no real limit to how low they can go, and as long as the investors understand that the Fed is backstopping them they'll contribute in pumping it up.
- coliveira 7y agoThis is a problem that the Fed created for itself. In the 20th century, a recession was a normal thing to be expected, even textbooks said this. It seems now that we have a whole generation that is afraid of going through a recession and apparently will do almost anything to avoid one. The Fed created this problem by manipulating the markets to avoid recessions when they should be occurring. Now it seems that the only thing guaranteed is that the country will burst when the next inevitable one happens.
- webninja 7y agoRecessions are not caused by stocks going down in value. Stocks going down in value is an indicator or symptom of a recession. In the same manner, a Coronavirus infection is not caused by a fever.