Dave Edwards and It’s Just my Take, 5-2-24
Quite the conundrum we have here: The Feds say there is no reason to trigger interest rate cuts just yet, because their inflation goal of 2% has not been attained. But car loans, mortgages, home improvement loans, etc will remain high if no action is taken. Our economy is resilient, but inflation is still a bit too high. What to do, what to do?
Fed Reserve Chair Jerome Powell has been steadfast: interest rate cuts will happen, but we have to get a slightly better handle on inflation. Fine, say numerous economists, who also claim that we are close enough that just a small rate cut will not bruise inflation any higher.
On the other hand, there are other management companies claiming that many businesses are doing just fine under the current rates, so let’s not sweat any rate cut talk. They suggest that firmer policy right now makes for a better likelihood of cuts later. Fine, as long as that does not mean a hike to make that happen. Powell says no hike right now, and clearly no cut, either. Maybe a cut by this fall?
What to do, what to do…indeed.
