Category: Politics, Religion & Money

Headline Answers Its Own Question

Inflation’s Down and the Economy’s Strong. So Why Isn’t the Fed Cutting Rates?

https://www.msn.com/en-us/money/markets/inflation-s-down-and-the-economy-s-strong-so-why-isn-t-the-fed-cutting-rates/ar-BB1hjHty

Inflation has been dampened and unemployment is low. Yay! The Fed’s two mandates have been achieved, and that’s why the Fed isn’t cutting rates.

But there is, of course, a “but.” Raising interest rates, back to where I think they should be, has exposed problems caused by the decade of zero interest rates and free money. Problems that have been compounded in the aftermath of the pandemic. The reality is simple and profound.

THE UNITED STATES ECONOMY IS BASED ON DEBT

If the Fed starts to lower rates before mid-year, it will be for one practical reason — to help commercial real estate developers and investors refinance their debts. The side benefit would be to boost residential real estate, but doing that risks increasing inflation, so I don’t see the Fed acting too soon. I’m sure they’re closely watching China’s real estate crisis.

https://www.npr.org/2024/01/30/1227554424/evergrande-china-real-estate-economy-property-collapse

P.S. In today’s NYTimes:

https://www.nytimes.com/2024/01/30/business/economy/fed-interest-rates.html

The Trusty Trustee

I thought I was done five years ago managing my late parents’ estate, but it seems a trustee’s work is never done. This came from American Express to correct an error they made in my father’s account.

So that’s $0.16 each for myself and my five siblings, and I’ll keep the extra four cents for my fee. But uh, oh. There’s no such account as The Estate of George Pratt, and as there was no formal dissolution process for the trust, I don’t know what its legal status is. I vow to earn those four extra cents by devoting myself full-time to the resolution of this pressing financial matter!