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michaelflutist's avatar

I'm no economist, but it seemed justified for them to have cut rates the last time they met in the summer.

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sacman701's avatar

I am an economist, and in retrospect they probably should have cut a quarter point in July.

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Jonathan's avatar

Agreed

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Kevin H.'s avatar

Didn't the fed say they didn't care about the economy, they wanted to bury inflation

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michaelflutist's avatar

No, the Fed would never say they didn't care about the economy. I think you mean that they had been willing to increase unemployment and bring a recession if that had been necessary to lower inflation.

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Kevin H.'s avatar

So basically they did say that but in a different way.

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sacman701's avatar

Yeah, they're required to weigh the tradeoff between inflation risk and recession risk. Up through this summer they had been more worried about inflation risk. Now they're more worried about recession risk, not because recession risk is especially high but because inflation risk has receded.

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Zero Cool's avatar

Yes but the Fed made it worse. Focusing too much on interest rate increases to stop inflation puts strain on peopleтАЩs wallets.

Senator Warren was right on when she questioned Jerome Powell on why the interest rates had to be increased. Powell was aloof and ignorant about the impact on consumers.

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michaelflutist's avatar

Yes, and she also criticized him for being willing to cause 2 million people to lose their jobs, but that didn't end up happening. The Fed didn't do perfect work, but their soft landing was a hell of a lot better than most of us expected - probably even them.

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Zero Cool's avatar

Certainly the Fed has had a tough job in trying to deal with financial markets and inflation, which has been problematic for the first time in ages.

Given there are still jobs being added per month instead of contraction, this will likely help the economy in terms of both the companies and the labor market.

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michaelflutist's avatar

Yep.

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Zero Cool's avatar

Yes agreed.

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