Economy

[OlDawg]

36 minutes ago, UT alum said:

Infusing cash before having an idea of how tariffs affect demand could be risky. Lowering rates to help finance an import tax is injecting money that will have zero productivity value. Again, don’t see how taxing U S citizens to further international political agendas will end well. India because we want to two them where to buy oil, Brazil because Trump doesn’t like the way they’re treating Bolsonaro. That is not an economic plan.

Yes. Could be risky. But, I think not in this case. We’ve had a stronger than normal 2nd quarter, and 3rd quarters are typically solid. I don’t think 50 basis points is too drastic with the adjusted employment numbers where they’re sitting. While it wouldn’t help the consumer right away, it would help business cash flow at a time when it’s needed. The other big item is the help it would provide the housing market. If the housing market could get back on its feet even a little, the economy would be in solid shape. Getting that benchmark down would help a lot. Still need more supply. But, it would be a big help for people financing, builders building, and even those remodeling to sell.

Definitely wouldn’t do what Trump’s suggesting with a 300 basis point whammy. That’s just nuts. I think 50 is about right for a slow walk to see where it goes. Like I say, if we can get the benchmark to within 100 of inflation—and have stability—I could give a little on the Fed’s target. 2%? 2.5%? 2.75%?…all pretty relative and arbitrary.

We’re in a new situation with the tariff money. Needs to go to pay down debt. We don’t need refunds. I know folks would like refunds. But, the long term issue is debt. There are enough tax breaks in the BBB that most will notice a pretty decent increase in take home pay. (Hopefully, they’re smart enough to put some away in a rainy day fund.)