https://www.metaintro.com/blog/global-hiring-frozen-tariffs-trade-tensions-job-market
The primary reason shown to reduce interest rate is to boost job market. But the hiring freeze is due to tariffs. So, what motivation is there to lower interest? Maybe to help with the real estate? Houses are not selling in my area, there is no buyer visiting.
Lower interest may make inflation worse without helping the job market.
Posted by Turbulent-Push-4657
5 Comments
If you lower interest rates, your interest payments will be lower.
Will it if the asset being bought is inflated in price?
The job market is not so one-dimensional where you can say “the hiring freeze is due to tariffs.”
Corporations were throttling labor intensity for the past two years by cutting full time employment, increasing part time employment, cutting hours worked, closing job openings, and reducing hiring.
We have been in a no hire no fire environment since before tariffs were announced in April, due to compressing corporate margins from falling consumer spending. Tariffs have only made it more pronounced.
We are cutting rates because we have barely created any jobs this past year after the last QCEW revisions where 911,000 jobs were revised away over the past 12 months. Our labor market is at complete stall speed. And once corporate profit margins fall below their historical averages, companies will begin wide scale layoffs to preserve what little margin they have left. Because there are currently no jobs being created, these layoffs will instantly translate into a spiking unemployment rate. The Fed sees this coming and is cutting to try and save the labor market.
If anything, I think Powell is highly annoyed by Trump’s antics and attempt to pressure him. I wouldn’t be surprised if he held interest rates steady for one more month. After all, how can we trust the new jobs report, when Trump fired the statistician last month.
Wont do a thing for jobs. Probably actually help companies borrow more money for automation and ai to replace jobs. But fed feels compelled to do something because that is what has always been done
Real action needs to be legislative–reduce tax burden on the working class and perhaps make it up with some form of wealth tax on those that have an absurd amount of wealth