The fact is, Obama had 0 his entire presidency until right at the end when it slightly ticked up. Inflation was still extremely low when Trump took over yet they raised rates under Trump to 2.5%. Then Powell ignored inflation under Biden until he was forced to raise rates, way too late.

Monetary policy under Biden and Obama favored easy money, while under Trump it did not. That's a fact.

Red Red Wine said:

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I'm no economics major, but I wonder about tariff driven price increases vs supply/demand driven price increases.

If tariffs are raising prices, what impact would cutting interest rates have on consumer buying power? It is not scarcity driving price higher so would lowering interest rates help or hurt every day consumers be able to afford more?

It is normally a fear to cut interest rates into an inflationary period, but historically those inflationary periods are driven by too much cheap dollars on not enough goods being made.

I don't see that as the issue here. In my opinion, the Fed SHOULD cut interest rates to help offset tariff-driven inflation. Production is not impacted. Demand won't suddenly overshoot supply - because the interest cut is to help consumers afford what they are CURRENTLY buying - not buy more than they are currently buying.

But, like I said. I'm no economist. Just trying to provide logic and historical perspective and ask the question. Maybe someone with a PhD in Economics can enlighten me.

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If it's tarrifs it's not a demand problem and has nothing to do with monetary policy. More stupidity from the Fed.

Logos Stick said:

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The fact is, Obama had 0 his entire presidency until right at the end when it slightly ticked up. Inflation was still extremely low when Trump took over yet they raised rates under Trump to 2.5%. Then Powell ignored inflation under Biden until he was forced to raise rates, way too late.

Monetary policy under Biden and Obama favored easy money, while under Trump it did not. That's a fact.

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Discussing inflation during the Obama administration without mentioning the shale revolution and how disinflationary it was is very misleading.

BigRobSA said:

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All one has to do is put down their phone, go to any store, and buy things to know that ****'s continuing to get more expensive.

More than makes any sense.

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a nice but small avocado toast with sunny side up egg and soft drink cost me $30 this last Sunday. Shocking.

Logos Stick said:

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The fact is, Obama had 0 his entire presidency until right at the end when it slightly ticked up. Inflation was still extremely low when Trump took over yet they raised rates under Trump to 2.5%. Then Powell ignored inflation under Biden until he was forced to raise rates, way too late.

Monetary policy under Biden and Obama favored easy money, while under Trump it did not. That's a fact.

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No disagreement on Obama. He benefited from a very low rate environment. But Trump benefited almost as much.

Drahknor03 said:

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Energy was up last month after popping up after the Iran strike. The 8% decrease is the YoY number.

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How much of that increase is due to seasonality? The YoY calculation take seasonality out of the equation.

BigRobSA said:

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All one has to do is put down their phone, go to any store, and buy things to know that ****'s continuing to get more expensive.

More than makes any sense.

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I go by the Whataburger Index..... I paid $8.51 for the #20 (Sausage Egg & Cheese Taquito meal) this morning and nearly $13.00 for the BBQ Bacon Burger Combo a couple weeks ago.

Both of those were $3 to $4 cheaper in 2022. And keep going up.....

Sims said:

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BoydCrowder13 said:

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We probably would have had rate cuts by now without the tariff stuff.

Even economists are only working off theory and some industry specific tariffs Trump did in 2019 as a roadmap here.

Powell was too late in raising rates in 2022. He doesn't want to fail on inflation again. He'd rather be late than early. And until the Fed has a good idea of what tariffs are doing to inflation, I doubt we see any movement on rates.

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My bigger concern is the Fed waiting for what they WANT tariffs to do to inflation.

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What us it they want and why?

Quote:

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[color=#000000]Both of those were $3 to $4 cheaper in 2022. And keep going up.....[/color]

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Well that's the definition of inflation.

AggieVictor10 said:

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Sims said:

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BoydCrowder13 said:

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We probably would have had rate cuts by now without the tariff stuff.

Even economists are only working off theory and some industry specific tariffs Trump did in 2019 as a roadmap here.

Powell was too late in raising rates in 2022. He doesn't want to fail on inflation again. He'd rather be late than early. And until the Fed has a good idea of what tariffs are doing to inflation, I doubt we see any movement on rates.

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My bigger concern is the Fed waiting for what they WANT tariffs to do to inflation.

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What us it they want and why?

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Their threshold for which they cut prior to the '24 election has already been met and surpassed. It's easy to assume their delay in cutting now is political and not tactical or data based.

They want to wait and "see what the impact of tariffs is..." That tells me two things (eta third thing)
- Powell, as usual, is tailoring metrics to fit his objective (see his invention of super core pce)
- Powell is hiding behind these metrics to cover agenda based decisions
- There is a built in assumption in Powells mind that tariffs will in fact manifest in a measureable way... what if they don't...how long will he wait?

The fear is, and is par for the course with the Fed, his failure to act in a timely manner will then be rectified by an overreaction at the wrong time leading to further issues.

Powell effed up when he cut rates in 2024 , I presume due to pressure from the Dems. He'd also be effing up if he cut rates now under pressure from Trump. Both can be true . I think he's a biased snake but I agree with him at this point in time. He's capable of making a correct decision even if it's for the wrong reasons.

Quote:

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The producer price index, a measure of wholesale costs, showed no change in June, against the forecast for a 0.2% increase. The same was true for the core PPI.

Though the numbers for headline and core wholesale inflation were subdued, final demand goods prices rose 0.3%, but were offset by a 0.1% fall in services.

Combined with Tuesday's consumer price index release, the data suggests that President Donald Trump's tariffs are indicating only a marginal bite on the U.S. economy.

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MemphisAg1 said:

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Cutting rates in a rising inflation environment is insane and a recipe for disaster.

That has been proven over the course of history in many nations around the world.

... and I don't hate Trump. Voted for him three times.

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Kind of like throwing gasoline on the fire. No thanks.

Sid Farkas said:

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BigRobSA said:

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All one has to do is put down their phone, go to any store, and buy things to know that ****'s continuing to get more expensive.

More than makes any sense.

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a nice but small avocado toast with sunny side up egg and soft drink cost me $30 this last Sunday. Shocking.

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Could've made that at home for about $2

He is biased but…..I agree no cut yet and he should admit that he caved to Biden and it perpetuated a problem

halfastros81 said:

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Powell effed up when he cut rates in 2024 , I presume due to pressure from the Dems. He'd also be effing up if he cut rates now under pressure from Trump. Both can be true . I think he's a biased snake but I agree with him at this point in time. He's capable of making a correct decision even if it's for the wrong reasons.

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That's probably a correct assessment.

Rates have to stay. Actually I would prefer they be a lot higher for a shorter period of time. We printed trillions and put it into to system during COVID. We have to clean all that up.

That must inflation won't make me get outta bed.

Karoline Leavitt just proclaimed the Biden Inflation Cris defeated. It seems foolish to announce mission accomplished so soon. Now, President Trump will have to own whatever comes next.