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Politics : Formerly About Advanced Micro Devices

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To: Tenchusatsu who wrote (1559592)9/17/2025 5:23:34 PM
From: Tenchusatsu  Read Replies (1) of 1577138
 
More on the Fed rate cuts ...

I agree with the view that the job market is soft. Hiring is down, and new job creation isn't happening. Companies aren't laying off for the most part, but they sure aren't hiring, either.

This concern probably weighs more heavily than the concern over tariff-related inflation. Indeed, this seems to be exactly what we are seeing in the economy these days, where Trump's chaos-laden tariff policy is impacting job creation more than inflation.

Either way, I think the Fed is trying to cut off a potential sharp drop-off in employment. That would be much more disastrous than a spike up in inflation, which would probably be limited to about 5% (wild-ass guess). The economy can easily absorb such inflation, but it cannot tolerate a spike up in unemployment.

In short, Powell may have saved Trump's economy from a policy-induced recession ...



Tenchusatsu

P.S. - The more optimistic take out of this is that Trump needs lower interest rates in order to encourage investment in domestic manufacturing. There may be method to the madness of Trump bullying his way toward lower interest rates ...
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