Jerry Powell could care less about you and me, but there’s a major collapse in commercial real estate brewing. He’ll cut rates so to bail out his buddies in the banks that over leveraged themselves.
Short term rates lower. Politically driven BS. We also have to lower rates so we won’t be paying a trillion dollars a year in interest. 3.5% inflation may be seen as acceptable.
Long term rates higher. Deficits, debt and long term growth prospects will drive rates higher on 10-40 year bonds. If inflation is 3.5% and GDP is 2% the ten year yield should rise to 5.5% or nominal GDP.
No cut this year.
Needs more specificity. Are you asking about the next fed meeting? Or the next hundred years? I don’t think they’ll lower rates in the short run until we start seeing some real economic pain, whatever that looks like. In the long run, I fully expect rates to go back down to zero or possibly even lower. Higher interest rates just don’t make sense to me in the context of modern macroeconomics for a lot of reasons.
4 comments
Lowering.
Jerry Powell could care less about you and me, but there’s a major collapse in commercial real estate brewing. He’ll cut rates so to bail out his buddies in the banks that over leveraged themselves.
The fact that you and me benefit is [considered an unfortunate side effect](https://www.youtube.com/watch?v=bIHH5Kh2dU0). He wanted 3.5m of us unemployed, *minimum*.
Short term rates lower. Politically driven BS. We also have to lower rates so we won’t be paying a trillion dollars a year in interest. 3.5% inflation may be seen as acceptable.
Long term rates higher. Deficits, debt and long term growth prospects will drive rates higher on 10-40 year bonds. If inflation is 3.5% and GDP is 2% the ten year yield should rise to 5.5% or nominal GDP.
No cut this year.
Needs more specificity. Are you asking about the next fed meeting? Or the next hundred years? I don’t think they’ll lower rates in the short run until we start seeing some real economic pain, whatever that looks like. In the long run, I fully expect rates to go back down to zero or possibly even lower. Higher interest rates just don’t make sense to me in the context of modern macroeconomics for a lot of reasons.