FED Chair Fed Up with High Rates Yet?

Letter to Ephesians: FED Chairman Powell must’ve swallowed hard in recently admitting Trump’s tariffs aren’t causing as much inflation as he had long feared & suggested interest rate cuts may need to begin in September after all. The Brits coulda told Powell so, having already slashed their rate way below his ...

As Trump economic advisor Peter Navarro said in taking a victory lap, “tariffs don’t fuel inflation. At most, tariffs create a one-time adjustment in prices, not the kind of runaway spiral that demands punishing rate hikes. And even that one-time bump may be negligible if, as we have long argued, foreign exporters – not American consumers – shoulder most or all of the burden. He concluded in his Fox News op ed, “the big question now is by how much” are the FED rates to fall before the end of the year? In itsy bitsy increments of quarter points or with full point at a time?

The stakes couldn’t be higher. Trump’s “fair trade” promise to voters in his mind depends largely on those targeted tariffs of his, but with the belief they would NOT hurt the country’s economic growth. Then, factor in as would Trump, his other key promises to accelerate growth, i.e., via tax cuts, deregulation of pivotal industries & the recreation of USA’s energy dominance. But, alas & again, this four-point pro-growth house of economic cards depends a lot on those interest rate cuts held back until now by Powell. And, there’s the rub as expressed in Novarro's “how soon and by how much?” question.

Davd Soul