“I personally think the Fed should drop rates... You would see a rocket ship.” -Trump
He’s actually right. If the fed dropped interest rates the stock market would soar. It would be like free cheap money for all the corporations which would use it to reinvest in themselves, acquire other companies, attempt riskier bets, increase hiring and grow across the board which would led to further growth in the economy.
Now whether this is good for the economy in the long term or not (basically we are continuing to inflate the bubble) is up for debate. But it is definitely good for the short term and will help Trump’s re-election chances. Basically as long as the economy is doing good in 2020 Trump is going to win re-election by a landslide. One way to keep inflating the bubble and prop up the stock market is to lower rates, and he knows this.
I’m not a Trump supporter or anything, I’m just stating the facts.
Quote source:
https://www.bloomberg.com/news/articles/2019-04-05/trump-says-fed-should-cut-rates-and-stop-shrinking-balance-sheet
comments
If they lower the rates, then the Fed wouldnt have anything else to rely back on in case of a recession
It is like you are saying that if we keep interest rates down then all recession possibilities would vanish. Not true.
In addition, very low interest rates in relatively strong economy means more people borrowing more money and maybe too much spending. This needs to be under control as this itself can cause economic crash.
Trump maybe gets the basic idea but is absolutely ignorant about the details. That’s why presidents consult scientists and economy professors and academics. Trump thinks he knows it all lol
I never said that.
You are the typical arrogant armchair-economist keyboard warrior Googler who thinks he knows everything.
I stopped right there, oh you sweet summer child. You probably also believe in trickle down economics and the tooth fairy.
Have a nice weekend- I really have nothing more to add. At least I know you are the “shifting goalpost” kind of troll and not merely a naive one.
We know corporations DON'T use low interest rates to reinvest in themselves. By observation (always better than ideology) they hoarde money and don't reinvest. They all just start sitting on huge cash piles which is counter productive.
If you want money reinvested in the economy instead cut taxes for the poorest 25% of families while raising them on the richest 25%.
The rich hoarde money while the poor spend every single cent.
Econ PhDs are idiots. Just look at the government, full of them.
This is based on 1000+ hours of reading financial books, blogs, and podcasts for the past 15+ years.
Wouldn't reversed inflation be better?
Disclaimer: I do not have an economics degree so I can't say if there are any negative effects of reverse inflation.
I'm not a Trump supporter or anything I'm just stating the facts.