Economic News

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Healing said:
Does he truly not understand the link between interest rates and inflation? Or tariffs and inflation? I mean, low interest rates plus a high tariff and isolation regime is a strategy to trigger stagflation, is it not?

This truly is as though Putin is making US economic policy.
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You are not appreciating that Trump is playing 96 dimensional chess. Here is the strategy that worked in last term:

1 ) create a recession via tariffs much like he did with his mismanagement of the pandemic in his 1st term
2 ) reduce consumer demand by increasing unemployment and increasing job insecurity
3) less consumer demand leads to stalling an increase in consumer prices

4) all the MAGAs wax nostalgic and rejoice that once again Trump has saved our economy from runaway inflation and needs to run for a 3rd term
 
ChileG said:
This guy is such a fucking moron. He “fixed” it by putting a (partial) pause on the stupid shit that everyone told him was causing the issues.
“Look how smart I am! There was an issue with me shooting myself in the dick so I stopped shooting myself in the dick. But I'm still considering shooting myself in the dick again, in the future, if no one will kiss my stinking ass."
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Added a little more.
 
So the dollar is falling. Crude oil prices are falling. But if the dollar falls, does that mean we won't see a corresponding or equal fall in the price at the pump?
 
lawtig02 said:
When we're drafting a new constitution when all this is done, I hope we'll remember to include that any commentary by a president on fiscal policy should result in an automatic lifelong exile to Elba.
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I agree with that, except that I think you typed fiscal when you meant monetary. Fiscal policy is the joint responsibility of Congress and the president. Monetary is what the Fed does. I'm pretty sure you know that and just mistyped; I'm clarifying for other readers.

Also, Elba ain't good enough. Napoleon came back from there. How about Easter Island?
 
BlueSmoke said:
So the dollar is falling. Crude oil prices are falling. But if the dollar falls, does that mean we won't see a corresponding or equal fall in the price at the pump?
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I don't think so because oil is traded in dollars. When we say oil prices are falling, we mean relative to the dollar.
 
Healing said:
Trouble with this Powell talk is regardless if Trump fires him, Powell is done next year. At which point, Trump nominates Kid Rock to the fed chair, and the reckoning happens next year, when our international relationships and trade policy are even further in the shitter.
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Well . . . by next year, with the economy in the shitter, I have my doubts that the Senators will be afraid of Trump any more. They will be in fact running away from him as fast as possible. Gonna be a lot of Elon and Trump in Senate ads next year. So I would hope they would not just rubber-stamp his bullshit.

In Trump 1, he tried to appoint quacks to the Fed and the Senate shot him down.

There are a lot of people in his administration and in Congress who would lose a lot of money with an incompetent Fed chair. A lot of people, a lot of money. I would think that would be a source of pushback.
 
BlueSmoke said:
I'm thinking that Trump's real purpose in bad mouthing the Fed chair is so he can have someone to blame when things go south. He never moves without having someone to blame.
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Maybe. But he has for years consistently complained that Powell wouldn't lower rates. And when you look at his ignorance re: tariffs, I think the simplest explanation is that he doesn't understand macroeconomics at all. As I suggested, the only time he's ever thought about interest rates was when taking out a loan. Low rates= good; high rates = bad. Also maybe Mike Flynn told him that when Trump went to him for an economics lesson.
 
lawtig02 said:
I hope everyone realizes how much our economy is in Powell's hands right now. If he sticks it out, we have at least a puncher's chance. If he resigns, holy hell. We might be looking at 1929 again.
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This comment reminds me of a conversation I had with a Trump supporter before the election. That we didn't have to worry about Trump because he wouldn't be allowed to follow his worst impulses. I may have responded with "well we going to vote based on our belief that he won't be allowed to do bad stuff? And that's not a bad sign?"

We seem to be there.
 
BlueSmoke said:
So the dollar is falling. Crude oil prices are falling. But if the dollar falls, does that mean we won't see a corresponding or equal fall in the price at the pump?
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Ordinarily, when the dollar weakens the price of oil rises (oil is traded in dollars). That is because a weak dollar makes dollar-traded oil cheaper for other foreign currency holders, often (but not always) increasing demand.

But there are countervailing pressures on demand for oil and this trade war is putting downward pressure on oil futures for now, so the weakening dollar is currently moving more or less in parallel to dropping oil prices.

Also, OPEC had decided to increase production (somewhat coincident to Trump winning), which is creating downward pressure on prices as demand slips due to trade war and recession uncertainty…
 
nycfan said:
Ordinarily, when the dollar weakens the price of oil rises (oil is traded in dollars). That is because a weak dollar makes dollar-traded oil cheaper for other foreign currency holders, often (but not always) increasing demand.

But there are countervailing pressures on demand for oil and this trade war is putting downward pressure on oil futures for now, so the weakening dollar is currently moving more or less in parallel to dropping oil prices.

Also, OPEC had decided to increase production (somewhat coincident to Trump winning), which is creating downward pressure on prices as demand slips due to trade war and recession uncertainty…
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As an aside, if the price per barrel tanks into the $50s for any time, that will completely undermine the drill baby drill approach as the price will be too low to be profitable for US oil companies to expand drilling activities … just another way Trump’s total lack of strategy chaos economy is undermining or could undermine other stated policy goals. Meanwhile, all this co to yea to drive up the cost of borrowing for the United States, putting increasing pressure on the budget even if there was no giant tax cut extension in the offing.
 
nycfan said:
As an aside, if the price per barrel tanks into the $50s for any time, that will completely undermine the drill baby drill approach as the price will be too low to be profitable for US oil companies to expand drilling activities … just another way Trump’s total lack of strategy chaos economy is undermining or could undermine other stated policy goals. Meanwhile, all this co to yea to drive up the cost of borrowing for the United States, putting increasing pressure on the budget even if there was no giant tax cut extension in the offing.
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but doesn't oil prices tanking still mean that gas at the pump will decrease even without drill baby drill and when consumer demand shrinks ?

and we can fill our cars with gas priced where it was when Trump left office in 2021 ? and don't forget the eggs;)

WINNING !!!
 
nycfan said:
As an aside, if the price per barrel tanks into the $50s for any time, that will completely undermine the drill baby drill approach as the price will be too low to be profitable for US oil companies to expand drilling activities … just another way Trump’s total lack of strategy chaos economy is undermining or could undermine other stated policy goals. Meanwhile, all this co to yea to drive up the cost of borrowing for the United States, putting increasing pressure on the budget even if there was no giant tax cut extension in the offing.
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Didn't Trump raise the tariff on steel? I would think that would have a tremendous impact on his "drill baby drill" scheme.
 
Healing said:
Trouble with this Powell talk is regardless if Trump fires him, Powell is done next year. At which point, Trump nominates Kid Rock to the fed chair, and the reckoning happens next year, when our international relationships and trade policy are even further in the shitter.
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Can't wait to hear what Fed Chief Maria Bartiromo has to say about things...
 
superrific said:
I agree with that, except that I think you typed fiscal when you meant monetary. Fiscal policy is the joint responsibility of Congress and the president. Monetary is what the Fed does. I'm pretty sure you know that and just mistyped; I'm clarifying for other readers.

Also, Elba ain't good enough. Napoleon came back from there. How about Easter Island?
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My AP Euro teacher said "If you are going to exile me, please do it in Elba."

Apparently it's quite nice...
 
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