The private sector lost 33,000 jobs in June, badly missing expectations for a 100,000 increase, ADP

President Trump supporters need to remember this and other economic indicators when the next inflation report comes out. Worse housing market in years, trade down about 5%, and potential loss in jobs should all point to inflation being a non-factor. Yet, inflation has stubbornly hung around 2.3%, which is still above target?

 

In other news, democratic cahooting Jerome Powell is still refusing to reduce interest rates.

 

Yes, democratic cahooting Trump appointee and lifelong Republican Jerome Powell.

 

Unlike Arthur Burns who as Chairman of the Fed caved into Nixon and lowered interest rates setting the stage for almost a decade of stagflation Jerome Powell has the balls to stand up to Trump's intimidation. By the way it wasn't just Powell, every member of the Fed's open market committee agreed with the decision not lower interest rates.

Although the article was written in 2023 it's even more applicable now.
The Fed Whiffed on Inflation in the ’70s. It Doesn’t Want a Repeat.
Arthur F. Burns is known as the Federal Reserve chairman who failed to stop surging inflation in the 1970s, resulting in America’s worst economic downturn since the Great Depression.

If there’s one thing today’s Fed Chairman Jerome Powell doesn’t want to be known as, it’s another Burns. Yet as the central bank’s tightening cycle nears an end, with an elusive soft landing in sight, he faces the choice of easing up or tightening the screws a bit more, risking a recession to make sure all the Fed’s hard work isn’t undone in one bad call.

 

I guess the handy "off topic," emoji can be utilized to concede that the responding poster concedes the point, but doesn't want to admit it.

 

That's because the FED has a dual mandate. Keep inflation low while promoting economic growth. Lower interest rates, and it causes inflation, which is already higher than the target.

Under normal economic conditions, with the numbers we're seeing from employment, housing, trade, etc., we'd be seeing inflation way below target. Possibly even deflation, which we did experience the last full recession circa 2010. But again, we're seeing inflation hanging around above the target, with warning signs inflation might still rise as companies that front-loaded inventory before Trump's Liberation Day will need to restock. Plus immigration raids causing crops not to be picked in time, meaning supply shortages for foodstuffs. And supply shortages also cause inflation.

We are potentially experience stagflation today. Maybe not to the extreme experienced in the 1970s, but many economic indicators look like they do during a recession, including the employment report. And inflation, while not out of control, is still higher than target.

 

LOL! The feds didn't hesitate to reduce rates 1 1/2% headed into an election season, a no, no, with inflation well above the 2% target.

 

What were the other economic indicators pointing to at the time of the rate reduction? Growth or recession? Answer this question and you'll have the answer to why there was a cut last October.

Again, the FED has a dual mandate. They aren't just there to control inflation. They are there to encourage growth. And in normal economic conditions, the dual mandate is easy to figure out as there is usually a direct relationship between growth and inflation. And in times of slow growth or recession, inflation drops due to demand drops, and the FED lowers the rate. Inflation gets out of control, and it usually means a strong economy, which can withstand a rate increase to curb inflation. It's only in times of stagflation where the FED mandate becomes impossible. Just ask Arthur Burnes.

 

I do think Powell should've dropped rates and this should make a rate cut in July increase in likelihood.

 

Powell is waiting until the inflation numbers for June come in. There's a lot of potential inflationary pressure from Trump's tariffs, and ICE raids that could cause prices to rise. If inflation is lower in June, then the FED will lower rates. But what should the FED do if inflation is stationary or even rises? A rate cut would cause more inflation, and we're looking at a potential 70s stagflation repeat.

 

HELL YEAH!!!!!!!! I love it when America does bad while the other team is in charge. YEEE HAW!!!!!!

(am I doing this right, MAGA?)

Edit…. Oh wait, I forgot… “ITS JOE BIDEN’S FAULT!!!!! YEEE HAW!!!!l”

 

Powell himself has recently stated there was no rate cut this last time because of conflicting data.

The Fed is facing a complicated moment, weighing sometimes conflicting data that could leave officials faced with both rising unemployment and rising inflation, the worst of both worlds for a central bank tasked with maintaining both stable prices and maximum employment.
Uncertainty over trade and other administration policies has left businesses also unsure of what to do, and the Fed's decision-making has been under virtually daily assault from a president eager to install his own chair when Powell leaves the Fed's top job next May.

Uncertainty over trade and other administration policies has left businesses also unsure of what to do, and the Fed's decision-making has been under virtually daily assault from a president eager to install his own chair when Powell leaves the Fed's top job next May.
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Power also reiterated the FED is waiting on the next inflation report before making any decisions. Especially since July 9 is the next major date for Trump's tariffs. Does Trump TACO out again? Or will the tariffs kick in. And what are the effects of the labor shortages being caused by ICE?

If inflation was dropping, the FED would have lowered rates their last meeting. But it's not. Even though all the other economic indicators are saying a rate cut should occur, doing so while inflation isn't dropping and is still above target could cause major issues.

 

TACO is on the verge of bringing us stagflation.

 

They started to reduce rates by 1/4 of a point each time they met last year, but if there was a strong jobs report, they would stop. As a realtor I prayed he would continue to reduce rates, but he never would because the economy was growing. Why did they lower rates to 2-3% in 2021? Because our economy was tanking fast due to national and international lockdowns. They wanted to encourage people to spend. When they want to discourage us, they raise rates. A lot of spending causes a supply and demand problem. Biden was giving us such a quick turn around and a projected soft landing, that the fed just kept raising rates. It was frustrating, but I didn't call him a trumpie. I guess you can blame Biden for this, his strong economy is holding up against the tariffs. All trump had to do was nothing and we'd have lower rates that he could take credit for.

 

And just think; the Fed would probably already be cutting if they weren't worried about inflation from TACO Trump's silly and random tariff nonsense.

 

Woopsie daisy. #Winning

 

Fun fact, this is the first negative jobs report since the last time TACO was president….

 

Don't worry, you'll get your wish soon enough. With the coming Trump-caused recession, the Fed is going to need to stimulate the economy by dropping its rate.

 

MAGA?!? The left invented it.