Macro Tourist

Macro Tourist: If I Was On The Fed, I’d Be Pushing Hard For An Emergency Rate Cut

"As a Fed board member, ask yourself what are the consequences of being late?"

"As a Fed board member, ask yourself what are the consequences of being late?"
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8 comments on “Macro Tourist: If I Was On The Fed, I’d Be Pushing Hard For An Emergency Rate Cut

  1. Curt Tyner

    Dude they are already late.

  2. Macro-Man, Forget the Fed Save.

    ed hike is bad

  3. More liquidity that chases assets won’t help the economy;and it won’t do a thing to stop Covid-19. And no mere consumers will get negative rates on their mortgages or credit cards -rate cuts are useless or worse except as a very temporary fix, which will cause even more pain when unwound.

    • Rate cuts slow the velociity of money and merely exacerbate the demographically-driven deflationary impulse that is sweeping the globe.

  4. Dude, dropping rates to zero will result in a massive liquidity freeze-up, global and long-term death zone. What happens as equities continue to slide and there is no safe haven or stability, do you really think negative rates will create long-term stability during a long out of chaos?

  5. Macro tourist has hit the nail on the head. The risks are asymetric, lots of downside if this is a real pandemic and nothing done, not much damage if the Fed jumped the gun. It is easy to raise rates and/or shrink the balance sheet if a cut was not in fact needed. Accelerating inflation is clearly not the issue here, a very nasty possible recession is a distinct possibility.

  6. Is liquidity (of the kind that is best addressed by Fed Funds rate cuts) the problem here?

    Not snarking, actually asking.

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