Tuesday, August 13, 2024

Rate Cuts? Not So Fast, Cowboy

Before you get the meme, get this:  the Fed's choice of keeping rates up a little has a great deal to do with maintaining the value of the USDollar in overseas markets--which will have the correct effect on inflation here.  In addition, higher rates will reduce spending, which is another blow to domestic inflation.

There are plenty of people--especially but not only real estate developers--who want rates lowered because higher rates cause pain to themselves, especially when all their notes have to be refinanced.  Car dealers are in a similar position, as is anyone who is highly leveraged with renewable notes.

So you get to choose:  maintain the US Dollar's value which will keep imports like petroleum cheaper?  Or make your local RE developer happy?

Or maybe stockbroker:

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