Staff Reports
The Federal Reserve decided it was time to slash interest rates once again, marking the third such cut in a row. Investors applauded this latest move, as the Fed trimmed its benchmark interest rate by a quarter of a percentage point, bringing it into a cozy range of 4.25 to 4.50 percent. In total, the Fed has now knocked a full percentage point off the federal funds rate since the cutting spree began last September. Apparently, the big wigs at the Fed think that lower interest rates will magically fix the economy as they chase after a few elusive financial unicorns.
With President-elect Donald Trump’s decisive win in November, a seismic shift is taking place in the economic realm. Business, investor, and consumer confidence are soaring higher than a patriotic bald eagle on the Fourth of July. While some skeptics worry that Trump’s intended tariff hikes might add a little inflation spice to the economy, the general consensus among the smarter folks in the room is that any potential price bumps would be more of a one-off deal rather than a prolonged assault on pocketbooks. Funny how the same people who predicted doom and gloom from Trump’s policies are the same ones flocking to their investment portfolios like moths to a flame.
Let’s also not forget that Trump’s strong stance on immigration, with promises to tighten border security, raises eyebrows. Some believe this might increase labor costs, which some say could spark inflation by boosting U.S. workers’ paychecks. However, this view seems to clash with the claims pushed by various economists that immigrant labor does nothing but suppress wages for existing American workers. It all sounds like a classic “no win” debate, where common sense gets lost in the intellectual shuffle.
Looks like the Fed wants to saddle Trump with worsening inflation right as he's sworn in https://t.co/XdYm87UIY4
— Breitbart News (@BreitbartNews) December 18, 2024
Businesses and investors are sharpening their pencils in anticipation of tax cuts and regulatory rollbacks—also known as “the good stuff.” With promises of fossil fuel-friendly energy policies, expectations for growth are riding high. It seems like the economic forecasts are looking brighter than a summer’s day in Texas. Meanwhile, everyday Americans are starting to believe that just maybe, the days of absurd regulations and taxes are behind them, paving the way for an invigorated American economy.
In the midst of all this optimism, one voice in the Fed choir decided to shake things up. Beth Hammack, president of the Federal Reserve Bank of Cleveland, voted against the latest cut, favoring instead to keep things as they were. The other eleven members of the Federal Open Market Committee jumped on the bandwagon for the cut, including Fed Governor Michelle Bowman, who has had more opinion changes than a chameleon at a color convention. It makes one wonder if the Fed is more interested in playing politics than pursuing sound financial policy. Either way, America seems poised for a financial renaissance—or at least a wild ride ahead.
