quote:

Interesting that wall street had a down day all around and even bonds were down a bit with the news.

Interesting day for the market. The DOW was up a percent immediately after the Fed decision, but ended the day .25% in the red.

This message has been edited. Last edited by: kkina,

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Originally posted by PASig:

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Originally posted by kkina:
OK, it seems the inflation rate is actually down, and the Fed chairman believes it is moving to a comfortable rate of 2%. Assuming an economy that is slowing (not everyone agrees), it may be the right time to stimulate the economy, though some feel that a half percent is too aggressive, too soon.

Didn't Joe and Kamala tell us over and over that the economy is strong as hell?

The economy is so great, it needs an crisis-level rate cut 2 months before the election...

Holy shit, batman!
The election is in a month and a half!
Stimulate the economy!!!

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Originally posted by AKSuperDually:
It happens every time they need a Democrat to get elected...

Bingo.

This has nothing to do with the economy and everything to do with the election.

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Originally posted by PASig:

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Originally posted by mod29:
How does making money cheaper help with inflation?

This is all about helping Kamala

Yes, no surprises. Now the debate in the media is how much, or little, this will help her.

In theory, the small drop will either stop / slow the dropping of inflation or, start its rise again.

Depends on how soon the resultant events are realized.

^That's basically correct, but is a half-point decrease really a small drop? Plus the Fed seems to be planning yet another half-point decrease probably well before the election.

Retiring ?
We have millions of new workers to offset that.

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Originally posted by Aglifter:
We had a genuine increase in cost, to a large extent, not inflation.

I believe inflation was a bigger factor in most of the economy than cost increase (see automobile discussion for an example of cost increase exception) and it was caused by cost-push inflation. Cost-push inflation is rarer and different than the more normal demand-pull inflation in that demand remains static but prices increase from lack of supply. Lack of supply can be actual goods, labor, or both. Gov't intervention (e.g. fed increasing interests rates) and gov't regulations (e.g. Commiefornia increasing minimum wage to $20) makes cost-push inflation worse. Since March '20, we've had supply chain issues, quarantined labor, increased interest rates, ~2 years of gov't paying people more not to work than they can earn in free market, and gov't mandated wage increases.

Automobiles are a prime example of where there was both inflation and cost increase. In numerous models the manufacturers chose to eliminate lower cost trim levels (e.g. only made the top trim level which had their highest profit margin). It helped the manufacturers manage the supply chain and it helped their bottom line by eliminating lower profit items. The net result was a double whammy to the consumer in that both the top trim level experienced inflation and there was no supply for the lower cost trim levels. Here is a pretty telling 5 year chart where generally anything above 23% is likely a price increase:

quote:

Originally posted by PASig:

quote:

Originally posted by mod29:
How does making money cheaper help with inflation?

This is all about helping Kamala

And it helps bring down the payments on the federal debt, what scares me is the money they save on the interest they will just spend.

Quote: OK, it seems the inflation rate is actually down, and the Fed chairman believes it is moving to a comfortable rate of 2%

Maybe it is slowing which I doubt but as usual those figures exclude food, energy and housing (last one IIRC), the Fed Chairman kind of glosses over that fact.

Just more to prop up the Harris ticket.

quote:

Originally posted by grumpy1:
Interesting that wall street had a down day all around and even bonds were down a bit with the news. It seems that so far the interest rate cut of 1/2 percent has prompted worries of a recession or a significant slowing of the growth rate which is not good news for such high stock valuations. It will also be interesting to see where the yield curve goes from here as it has been out of whack for a record amount of time.

I owuld have been pissed if it had stayed up. The stock market is supposedly efficient in that the rate cut was factored in when the information / probability was available.

I don't mind the sideways movement of the stock market. I'm still waiting for the recession that's was suppose to happen first quarter of 2023.

The Federal Reserve has no reserves... and is not a Federal agency.
It's a misnomer.

I had to get a mortgage 1.5 years ago, divorce. It was a relatively easy way to get some cash.

I ended up at 7.12% over 30 years. I also didn’t care for the mortgage co, a factor. I just locked in a 20 year at 5.5%, today. Since I already bank there, costs are relatively low. My payment goes down $400 with the 20 year at the new rate. Yes, I’ll pay it early.

Since I’m borrowing 66% of the appraised value, that helps too.

This is all politics aside.

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Originally posted by kkina:

quote:

Interesting that wall street had a down day all around and even bonds were down a bit with the news.

Interesting day for the market. The DOW was up a percent immediately after the Fed decision, but ended the day .25% in the red.

Yesterday investors looked at it, were excited, then got scared. Today they looked at it again, back to excited with the DJIA up 522 pts (1.5%).

So the market's happy coming out of the gate, but let's see if the economy as a whole really does strengthen without an inflation runaway.

The Fed wasn't ready to drop interest rates based on inflation. They want 2% and know it's still above 3%. They are concerned about the unemployment numbers not coming down, so they dropped rates.

I think the .50 basis drop was good. The next two .25 drops? Okay. More drops after that sound like whiplash. They need to leave it alone for a while. The Fed has never once been able to engineer a soft landing.

^Isn't the inflation rate currently at 2.5%?

quote:

Originally posted by kkina:

quote:

Originally posted by kkina:

quote:

Interesting that wall street had a down day all around and even bonds were down a bit with the news.

Interesting day for the market. The DOW was up a percent immediately after the Fed decision, but ended the day .25% in the red.

Yesterday investors looked at it, were excited, then got scared. Today they looked at it again, back to excited with the DJIA up 522 pts (1.5%).

So the market's happy coming out of the gate, but let's see if the economy as a whole really does strengthen without an inflation runaway.

At this point at almost age 73 I am bout 20 percent in the stock market. I would consider raising that to as much as around 35 percent if I see what I consider a buying opportunity but not at these levels. Going to be interesting to see what happens in the next few months.

Figures. My CD's are all maturing next month just as rates are dropping.