Another SPOTLIGHT about the FED! 😅
We'll stop after this one. Promised.
But there is still a lot to unpack about the Jackson Hole speech.
Here is an excerpt:
"If inflation expectations fall below our 2 percent objective, interest rates would decline in tandem. In turn, we would have less scope to cut interest rates to boost employment during an economic downturn, further diminishing our capacity to stabilize the economy through cutting interest rates."
There are two important ideas in this small excerpt:
1.Cutting interest rates equals a boost in employment.
It's therefore easy to understand that, for the FED, if U.S. unemployment numbers don't decrease, we won't see any increase in interest rates for a while.
2.Low interest rates will diminish the FED's capacity to stabilize the economy.
Sure, this is the FED's point of view, but why would it be such a bad thing to reduce the influence of a central planner?
If you look back in history, the past has rarely been kind to central planners, so we're not sure why things should be different this time around.
Still not convinced?
Maybe this last bit of information will change your mind:
Quantitative easing asset purchases are likely to reach 6 trillion U.S. dollars in 2020.
$6,000,000,000,000.
tick-tock-tick-tock ⏰
Consider hedging against the FED’s quantitative easing with a trusted save haven.
