Quote from: punk.zink on September 03, 2025, 11:12:14 AM

The key is for the Fed to maintain its traditional independence. This means working and making decisions based on data, not political pressure. Under current conditions, the most appropriate policy, in my opinion, is to hold interest rates longer, while waiting for evidence that inflation is truly approaching the target, rather than bowing to Trump's political pressure. Because the labor market is healthy, inflation remains above target, with the added risk of import tariffs. Therefore, urgent interest rate cuts are counterproductive and could trigger inflation, weaken the Fed's credibility, and ultimately lead to more drastic interest rate hikes in the future. Trump's policy is a short-term political calculation, but it has the potential to cause medium-term macroeconomic instability, as global investors are always watching to see whether the Fed is independent or merely a political tool for Trump.

So, going forward, let's see whether the classic recipe for inflation—high fiscal deficits + import tariffs + interest rate cuts—is realized, or whether energy stability, successful trade negotiations, and technological productivity will suppress prices.

To be fair, it's about creating more jobs as well. When the interest is high, there is no incentive to invest your money elsewhere, there is no reason to look for anything else. If you really want to, you could just simply end up with investing that money into interest and get good return. But when the interest is low, then that means you can use that to invest into starting yet another factory or something, or another shop, and that way hire more people.

Do you know how many people are fed just with one big Walmart? All those workers and their families get to live and feed. So yeah, lower rate would equal to lower unemployment, more spending, and then it would lower the inflation and make the economy go bigger.