Latest news with #economics
Bloomberg
9 hours ago
- Business
- Bloomberg
Trump Says He'll Choose Fed Chair Who Wants to Cut Rates
CC-Transcript 00:00Love them to resign if he wanted to. Agent done lousy job. Look, if you were there, you'd say, well, you know, the United States is doing well. They have no inflation. And if they do get inflation in a year or two, we'll put we'll start raising the rates. We get rid of the inflation, you know, do other things. Biden had the worst inflation in the history of our country. 19%, but I think it was much higher than that. Frankly, they say 19%. I said I think it's a lot higher than that. And we have almost no inflation now. We've done a great job in a short period of time. Energy prices are way down. Gasoline now is down to close to $2 in a lot of places. A couple of places I see it even broke. It's like 198 a gallon. We've done a great job on inflation and honestly, pretty much everything else. I think that I think it's very sad the way people act. You know, you have a guy in there that with the stroke of a pen, could lower interest rates and save us hundreds of billions of dollars a year. But he's a stupid person. You know, it's very interesting. He. I'm not sure if he doesn't understand it, because you should be able to understand it. It's sort of one on one economics, but I'm not sure of that. But think of it with the stroke of a pen, he talks about costs we can save. $600 billion. Maybe even these are nice numbers for you, right? $900,000,000,950 billion by lowering interest rates. And it's really just more of a paper movement. It's not like you're not cutting anything. You're not cutting jobs. It's just interest rates. And we're number 40 or 44, number 45, some places that you wouldn't believe that. You know, I don't want to be disparaging, but they pay a lower interest rate than the United States of America. And without us, everything blows up. You know, we sort of control the world in that sense. But we have a guy that's just a stubborn mule. And the stupid person that is making a big mistake is making a mistake. And it lasts for years. Because when you do the debt now, I've instructed my people not to do any debt beyond nine months or so. Get this guy out and whoever is in there, it will lower rates. If I don't if I think somebody is going to keep the rates where they are or whatever, I'm not going to put them in. I'm going to put somebody that wants to cut rates. There are a lot of them out there. And I said this morning, a lot of the business shows today were saying, you know, Trump is right. He should be cutting rates. Think of it. We have a great country. We're making a lot of money, would take it in billions of dollars in tariffs. We have one we have $15 trillion of money that wants to be invested here, which is a record in two months. It breaks any record that we've ever had for a whole year and not even close 15 trillion. And it's going to be much higher than that. That's after essentially two months because, you know, we've been doing it for about two months, two and a half months, $15 trillion breaks, every record in the book. There's never been anything like this. We have factories moving in, we have car plants moving in. We have everyone wants to be part of the United States. And as I told you and I said to everybody when I was in the Middle East, the king of Saudi Arabia, Qatar and UAE, all great leaders, they've all great leaders, all three of them said, you got the hottest country in the world and you did it. And at that time, I was there for four months. We got back a little while ago, but everybody says not only them, but we have the hottest country in the world right now. The only thing is we have a Fed chairman that is he doesn't get it. And you could have substantially lower like if we cut him two points would save more than 600. Think of it, more than $600 billion just because you cut. But you can't go out to the market and say, well, we have a guy that's got us at 4% or four and a half percent and we want to pay 2% or 1%. I think we should be paying 1% right now. And we're paying more because we have a guy who's suffering from, I think, Trump derangement syndrome, if you want to know the truth. But he's not good for our country.
Bloomberg
19 hours ago
- Business
- Bloomberg
The UK's Governance Is Looking Vulnerable Again
Welcome to the award-winning Money Distilled newsletter. I'm John Stepek. Every week day I look at the biggest stories in markets and economics, and explain what it all means for your money. Just a quick favour, if you've got time this lunchtime — it's the last time I'll ask, I promise — please help us out by filling in this questionnaire. Gloriously happy or deeply frustrated, we'd love to know how you feel your personal financial situation has changed in the last year.
Yahoo
19 hours ago
- Business
- Yahoo
Fed's Kashkari expects two rate cuts this year, with pause possible
(Reuters) -Federal Reserve Bank of Minneapolis President Neel Kashkari is sticking to his view that cooling inflation will allow the world's most important major central bank to cut its policy rate twice this year, starting in September. In an essay released on Friday, Kashkari also signalled that if progress on inflation stalls or reverses the Fed could simply pause its rate-cutting cycle until prices ease again. Tariffs suggest an inflation boost is "likely coming," he said, as more goods from Asia, subject to the biggest tariff increases, arrive on the shelves of U.S. businesses. While businesses may not want to risk angering customers by charging more for their wares, they will start passing on price increases in the absence of trade deals lowering tariffs, he said. In this scenario, the effect of tariffs on inflation may simply arrive later than expected, Kashkari said. At the same time, Kashkari said, the economic data so far has revealed "only a modest imprint of the effects of tariffs on prices, activity or the labor market," with inflation making renewed progress toward the Fed's 2% goal. That may suggest, he said, that companies have won exemptions, have adjusted their supply routes, or are otherwise finding ways to avoid the tariffs altogether, limiting the impact on inflation. "Those opposing signals have led me to maintain my outlook for two cuts over the remainder of 2025, implying a possible first cut in September, barring some surprising development before then," Kashkari said. "If we were to cut in September and then the effects of tariffs showed up this fall, I believe we should not be on a preset easing course" but could adjust to fit the new data, he added. "If the data called for it we could hold the policy rate at the new level until we gained greater confidence that inflation was headed back to our target." For now, though, Kashkari said: "We should put more emphasis on the actual inflation and real economic data that we are seeing without committing to an easing policy path in case the effects of tariffs are merely delayed." Last week, Fed policymakers left their overnight target rate for lending between banks unchanged at between 4.25% and 4.5%. Uncertainty over the outlook is keeping the central bank on the sidelines amid expectations the tariffs will push up inflation this year while depressing growth and hiring.
Bloomberg
2 days ago
- Business
- Bloomberg
What's Behind Persistent US Dollar Weakness?
Donald Trump's frustration with Federal Reserve boss Jerome Powell is not the only factor. By Save Welcome to the award-winning Money Distilled newsletter. I'm John Stepek. Every week day I look at the biggest stories in markets and economics, and explain what it all means for your money. The pound was looking very strong this morning. We're back up above $1.37. If this continues for much longer, we might get back above the post-Brexit highs (in the region of $1.44). What have we done to deserve such currency market confidence?
Yahoo
2 days ago
- Business
- Yahoo
Contributor: No one can grasp trillions. Here's how to make sense of federal spending and debt
I'm a finance professor at UCLA, so let's talk finance. Which numbers are more meaningful to you? Having $50 to $100 cash in your pocket (rough average for an American) or knowing the total U.S. currency in circulation is $2.4 trillion? Owing $7,300 on your credit card (average balance of those who don't pay it off every month) or envisioning the total U.S. credit card debt of $1.2 trillion? Being $250,000 in debt on your home (average among American consumers with a mortgage) or seeing that the nation's total residential consumer mortgage debt is $12.8 trillion? Holding $250,000 in your 401(k) or IRA account (average for baby boomers, now old enough to need it soon) or knowing the total U.S. savings in such accounts is about $27 trillion? Receiving a monthly Social Security check of $2,000 (the average) or considering the balance of the Social Security trust fund at $2.7 trillion? I've been researching and teaching economics for more than 30 years, and still I can't wrap my head around trillions of dollars. I'm guessing you can't, either — and neither can our senators and representatives who determine the federal budget. And yet, our government insists on communicating with us in this unfathomable language. Worse, even our best media outlets rarely translate the government's incomprehensible abstractions into understandable numbers, giving us sentences like this one from the Wall Street Journal: 'President Trump's tax-and-spending megabill would increase budget deficits by $2.4 trillion over the next decade, compared with doing nothing, according to a Congressional Budget Office estimate released Wednesday.' (By the way, that figure has been revised to $2.8 trillion as of June 18 — as if the human mind could comprehend the difference between those boggling figures.) And so I want to help people understand both our federal budget deficit and the resulting national debt, as well as our government's free-spending ways. (Both parties are to blame; no need for politics here.) The national debt today stands at about $37 trillion. This means that each of our 347 million people is on the hook for about $110,000, or about 2.75 years the median income of $40,000 per year. Of course, not every U.S. resident earns income or pays income tax. With "only" 154 million taxpayers, this means that the average taxpayer's piece of the $37-trillion federal debt is about $240,000, or six years of the median income. Think of this as your share of our federal debt. The government may have borrowed it, but ultimately you are on the hook for it. Feel better now? Probably not. For most people, learning that you owe $240,000 is a lot more concerning than hearing that the national debt is $37 trillion. And your piece of our collective problem is still growing. Each year, our federal government takes in about $35,000 per taxpayer ($5 trillion) and spends about $45,000 per taxpayer ($6.75 trillion). Lawmakers are currently not paying down our debt but adding about $10,000 per taxpayer every year to our already outstanding balance of about $240,000. Unfortunately, we have another problem. Our outstanding debt was issued at low interest rates (around 2.3% per year). This is about to change. When it comes due, refinance interest rates will likely be more like 4% per year. Federal spending on interest will rise from the current level of about $6,000 a year per taxpayer to more like $10,000. Back to the 'One Big Beautiful Bill Act' that the Wall Street Journal was reporting on. Roughly speaking, over 10 years, the Congressional Budget Office estimates the legislation would add a total deficit of $18,000 per taxpayer. Whatever debt balance we expected to reach in about 10 years, under this new budget, we would be expected to reach that debt in nine years. In itself, debt isn't so bad. For instance, as your home's value grows, the mortgage percentage shrinks. If your income rises, that helps, too. Our 25-year-old business school students, who have no current income but take on a six-figure debt, can typically comfortably pay off their debts and support a nice lifestyle, too. Unfortunately, not so for our federal malaise. Our income and tax bases are growing nowhere near as fast as our obligations. With growing deficits and rising interest rates, we are instead accelerating our obligations. Today, we are spending about $850 billion a year on our military, or about $5,500 per taxpayer. Interest payments are just about to exceed that. Adding in our running deficits, even if we assume that we can greatly increase our economic output, tax base and tax intake, and that there will be no recession, and that tariffs will cover about one-third of our deficits (a combination that few economists believe), we are still heading straight for a date with a metaphorical bankruptcy judge. Fortunately, this is legally impossible. So what can possibly happen? First, we could get exceedingly lucky: Economic growth could reach higher than it has ever been. Maybe we can all collectively become more innovative (and less hamstrung by our abundant self-inflicted inefficient policies, rules and regulations). I wouldn't count on it. Second, our politicians could raise taxes, curb spending or do both. However, we have no collective appetite for this. (Those actions could slow growth to the point that they become counterproductive.) Third, we could "print" money. However, this would leave us in a fiscal situation similar to that of many developing nations, with galloping inflation and untrustworthy currency. Who would then lend us money? It surely wouldn't "make America great again." Living beyond our means is not a Republican or a Democratic problem. Our parties may disagree about what to spend the money on, but both show by their actions that they agree spending more is better than spending less. Politicians are reflections of their electorates, and we the people are not ready for any pain. If our voters can begin to comprehend our problem, we'll be on our first step toward a solution. Ivo Welch is a professor of finance and economics at the Anderson Graduate School of Management at UCLA. If it's in the news right now, the L.A. Times' Opinion section covers it. Sign up for our weekly opinion newsletter. This story originally appeared in Los Angeles Times. Sign in to access your portfolio
