Oddbean new post about login | logout The Fed just cut rates with entrenched inflation above 2.5%, the government is running multi-trillion dollar non-recessionary deficits, and a President just bought cheeseburgers using #Bitcoin. Welcome to the future.
I believe the phrase is, "Nothing stops this train."
They cut rates by 10%. It should increase global M2 by at least that amount. Melt up, is my guess.
Huh. Never thought of it as cutting rates 10%. Is there real connection there or did you sort of spitball the conclusion? Genuinely curiou
They set the risk free rate 10% lower, so if loans follow suit than it should spur more printing through financing. I have no idea of the relationship of 10% = 10%. But the world follows the US, so cutting rates worldwide should only cause upward pressure on global M2.
Well you’re ignoring fiscal policy
I’m not that smart, but I think this should incentivize the government to spend more (probably the entire point of cutting rates in the first place), and issue more debt, increasing the US$ M2. I fail to see how this has anything less than upward pressure on M2, unless you mean it will increase *more* than my prediction. The 10% won’t be this year, but should be a minimum however long it takes to move throughout the economy, starting with Nancy Pelosi, of course.
It’s not that simple. Fiscal policy is determined by election promises from years earlier, public sentiment and the will of politicians to make tough decisions that the public might not enjoy immediately. See eg Milei in Argentina or Howard in Australia. Earlier in Europe following World Wars, or Japan more recently, selling infrastructure to pay debt, despite cost of borrowing being negative. Even imposed externally like IMF in Latin American crisis or Greece. These have a far bigger weight than the cost of borrowing. In fact I’d bet on there being a positive correlation between low interest rates worldwide and lower government spending, since interest rates are usually cut after the government is unable to spend to stimulate the economy any further and is approaching debt levels where some form of austerity becomes necessary for reasons I can expand on if you wish.
First the President buys 🍔 Then the President buys ☮️ This is #bitcoin
How does his crypto grift fit in this picture?
Money printer go brrrrrrrrrrrrrrrrrrrrrrrrr
I’m class of 2017. This certainly escalated quickly.
What a fucking clown show we are in.
What matters more than 50bp cut is 1/3 of US FED Debt expiring next year thanks to Janet too short Yallen. So either they're going to flood the bond market and jack up interest rates (not gonna happen) or the FED is going to have to absorb all of it. I don't know how much of the debt is already owned by the FED, so it might be a null point, but I assume some isn't, and it might not be insignificant. nostr:nevent1qqstwna83252muwc6nnpdjg3hufnhzk4ur7gjwwffj6fnj0s6nx5jjsppemhxue69uhkummn9ekx7mp0qgsvfz6uem26mf6dkpud76cqlfflcyfe6ualpmgkmce9653zqggah4grqsqqqqqpgwyphu
...where are my chessburger?🍔🍟
