Fed Announces More Price Controls
On Wednesday night, Peter took to his podcast to analyze the Fed’s 50 basis point rate cut. He discusses the Fed’s motives in cutting interest rates, why the move is another mistake in a long sequence of policy errors, and also points out the irony in campaign rhetoric surrounding price controls. Make sure you also see Peter’s appearance on Fox Business, where he also discusses the Fed decision.
Peter predicted a 50 basis point cut, even though some expected 25. Powell doesn’t like to disappoint the market:
“In fact, once I saw that the markets were anticipating 50 basis points, it was pretty much a done deal that the Fed would deliver on that expectation, because the Fed never wants to disappoint the markets. Had the Fed cut rates by 25 basis points, the markets would have tanked because it would have been a big disappointment.”
Americans are so used to low interest rates that they ignore both the benefits of high rates and the role of interest in coordinating saving and investment:
“Now, absent the government’s intervention, interest rates would have to be much higher to restore some type of balance where the higher rates would encourage people to save, because they woul
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