Thread

1. aurareturn · 1789628264 · focus · HN ↗

   This administration wants lower rates. Also this administration does everything it can to increase inflation such as tariffs and starting another endless war in the middle east.

   1. DarkmSparks · 1789632007 · focus · HN ↗

      The administrations choices are fairly binary now.

      Inflate away the $40Trillion+ debt they can never pay back

      Or

      Hard default on the debt, and be the one holding the hot potato as the union breaks up.

      Fed is trying to thread the needle between the two and keep the music playing as long as possible.

      1. grey-area · 1789632450 · focus · HN ↗

         There is one obvious choice here, the policy is inflation and always has been.

         1. DarkmSparks · 1789633846 · focus · HN ↗

            From the adminstration

            Fed independance is about tempering that policy so UST still has buyers.

            1. grey-area · 1789637681 · focus · HN ↗

               Fed policy is explicitly controlled inflation (2% target).

               1. pjc50 · 1789639666 · focus · HN ↗

                  2% inflation isn't going to inflate away the debt any time soon. It's basically as close to zero as can be realized without going under.

                  1. grey-area · 1789718409 · focus · HN ↗

                     It is not in fact close to zero, it is significant inflation, particularly as they tend to float over the target (3-4%).

                     At 2% over just 25 years money loses 60% of its value. That is not insignificant, and of course with higher rates it loses value quicker.

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