Historically the fed has had a dual mandate to both manage inflation and the employment rate, attempting to keep both in a band with their interest lever. This has always worked historically because when you lower interest rates you hire more people and do more work.
But ‘work’ is no longer a direct function of employment especially in white collar sectors so this lever will lose some of its power.
UBI is on the table but likely not with the current administration and it would also cause inflation, increasing tariffs which is a tax on consumption may be something that is in play but that money won’t trickle down to the workers, increasing taxes is also unlikely. What are some thoughts on how this might play out?
What happens when they cut rates and jobless numbers don’t improve?
byu/TheOneNeartheTop instocks
Posted by TheOneNeartheTop
33 Comments
Cut some more barring inflation
Half the country doesn’t want free healthcare because they’re told it’s socialism.
There’s no way UBI ever gets implemented until the boomer representatives have moved on from this plane. They even blamed the checks sent out over lockdown as the culprit for the insane inflation issues.
Rate cuts and job numbers don’t improve? Recession. I don’t see people NOT pulling their money from the market
Stocks will keep going up and r/stocks user will keep seething with their bonds and European stocks
I have the feeling the job numbers won’t improve and Powell will be blamed for being slow to react, again. But tbh, it wouldn’t have mattered even if he cut early.
What they will probably do is turn the money printer on gradually, and do a “supplement wage” idea. It won’t be a full on socialist “UBI” idea, but something that gives the average jobless joe the tools (cash) to keep fueling the spending for companies to generate $$$
Lower rates more so the banks & rich can get more cheap money.
They punted the ball on real inflation a long time ago. They don’t care about job numbers or food inflation.
Just whatever keeps the markets high and the housing bubble intact.
They keep cutting rates or print more money to create jobs.
They’re not going to. People aren’t delaying hiring because of rates, they’re not hiring because of instability. No one know what will happen with tariffs, no one knows what trump will defund next. Oh, and at the end of September we might have a government shutdown. You have ICE attacking immigrants that work in farmers fields, people bought into AI but are realizing the returns aren’t what they thought, and foreigners don’t want to come here.
So, yeah… interest rates don’t fix any of that, but it will devalue the dollar and increase inflation.
The US threw out of potential for… reasons. Who knows if that potential will remain if we’re ever allowed to have a new president again.
GPUS starts flying
Consider the whole lust for AI is to eliminate jobs, I have no expectations at all of jobless numbers improving
It’s going to take time for cuts to improve jobs. Gonna get to oct and they’re going to cut by a whole lot because everyone will be panicking. Gosh I wish I was confident enough to buy puts.
If corporate profits keep going up with AI, then they don’t care
Doesn’t matter, stock market up we go. US will never go into a recession. They can print the fk out of everything once they change the meaning of the data.
Volcker happens.
We have secular depopulation. Eventually markets have to stomach fewer jobs and less spending in the long arc.
Release fake job numbers
They’re already cooking the books, so who knows what’s real anymore 🤷
Hyperinflation and stagflation
I don’t know if investors care about job numbers in this day and age.
When companies like FB started to do mass layoffs, investors cheered that and started to buy dips in the stock back in2022. Before that the stock had gotten decimated going from $360 to $80.
Job numbers won’t impact large cap tech stocks much either way. And large cap tech is basically s&p and qqq
Let’s ask the job creators?
Piss on white collar jobs that AI has wiped out, gonna have to flip some burgers
I concept slipped through my mind: would some day that automation level is so high that less and less employees are needed to maintain the same level of productivity.
They theoretically keep cutting rates until 0 and start buying treasury bonds
stagflation, that is where we are headed. worse than anything we have experience in mdoern times. Just hope it doesnt lead to hyper inflation.
It is also silly to believeeleive lowering interest rates is what is going to increase jobs. Businesses have jobs because they provide an increase in net profit. What we need is an increase in spending which will only come through an increase in wages or stimulus to middle and lower class. But this will also bring more inflation due to stagnant supply.
what happens is $FNMA & $FMCC moon. that’s all that matters. IYKYK
whoever isn’t on this train I feel for you.
The beatings will continue until morale improves.
Rejigger how they calculate inflation. They have done this eight times in the past I think.
Think about it: They already exclude things that are considered “volatile”. You need food and energy to live and get to work (AC is also nice in the south). They don’t care what is in the inflation calculation as long as it looks good so the rich can borrow cheap money. Next, inflation will just be calculated on the price of corn and we will just keep subsidizing it and wonder why we are all so unhealthy eating foods loaded with corn syrup.
Job numbers have been abnormal for a few years. Loads of ‘help wanted’ signs is not healthy. The better argument is whether job numbers get worse than they traditionally have been over the past 10-15 years not if the numbers return to the abnormal recent years.
Quantitative Easing Part Deux
Who told you that historically rate cuts led to lower unemployment?
When cuts **begin into or near a recession**, unemployment **almost always rises for a while** before turning down (1957–58, 1960–61, 1969–70, 1974–75, 1980, 1981–82, 1990–91, 2001, 2007–09, 2020).
>UBI is on the table but likely not with the current administration
Have you heard of UBI’s little brother, WBI?
White Basic Income.
Trump is thinking about it.
If cuts don’t move jobs this time, it just shows money printing isn’t the same as hiring anymore. Cheap credit might pump stocks and housing, but unless there’s real demand or structural fixes, unemployment could just stay stuck
1970’s Stagflation—jobs fell, rates fell, inflation rose.
https://www.investopedia.com/articles/economics/08/1970-stagflation.asp