Inflation skyrocketed because of Biden’s spending, regulations, border policies, and energy policies, not because of low interest rates. 

Then inflation slowed down because people hit a brick wall on spending, not because Biden’s policies changed or because of higher interest rates. 

Interest rates themselves cause people to spend more, which is inflationary. 

Trump’s reduction of regulations, reductions in federal spending, closing the border, and reducing energy prices should take pressure off inflation. 

And here is the simple-minded WSJ advocating to keep interest rates where they are. 

A Question for Jerome Powell: Why Cut Interest Rates Now?

Progress against inflation has stalled, and financial conditions hardly seem restrictive.

The federal reserve is supposed to watch jobs along with inflation, and so much of what we have seen about job growth has been fictional.  The people at the Fed overstated jobs by over 800,000 in the year ending March of 2024.  Now we see that in the second quarter, jobs were going down in 25 states and up in only two.

Biden Lied About Everything: Philly Fed Finds All Jobs “Created” In Q2 Were Fake

The final results, as everyone knows by now, was a shocking 818K revision lower, just as the Philadelphia Fed had predicted 6 months prior, in March, when it calculated correctly that the Biden Department of Goalseeking Propaganda had overstated payrolls by “at least 800,000.”

“Estimates by the Federal Reserve Bank of Philadelphia indicate that the employment changes from March through June 2024 were significantly different” — read lower — “in 27 states compared with preliminary state estimates from the Bureau of Labor Statistics’ (BLS) Current Employment Statistics (CES)”, the Philly Fed said on December 12.

“Estimates by the Federal Reserve Bank of Philadelphia indicate that the employment changes from March through June 2024 were significantly different” — read lower — “in 27 states compared with preliminary state estimates from the Bureau of Labor Statistics’ (BLS) Current Employment Statistics (CES)”, the Philly Fed said on December 12.

“According to the early benchmark (EB) estimates conducted by the Phily Fed, employment was lower in 25 states, higher in two states, and lesser changes in the remaining 23 states and the District of Columbia.”

Businesses need to reduce costs when they are losing money.  The Federal Reserve should be not at all different, and its major cost is interest that it pays to banks.  And the Federal Reserve is losing a huge amount of money — over $300 billion in two years.  So these people are printing money to cover their losses, which is also inflationary. 

Fed’s paper losses top the $200 bln mark

U.S. Federal Reserve losses crossed the $200 billion point this week, according to data released on Thursday by the central bank.

The Fed reported that as of Wednesday, the level of its so-called earnings remittance to the Treasury Department stood at negative $201.2 billion.

So for the editors of the WSJ: There are two big reasons the Federal Reserve should cut interest rates. 

1) The job market is exceptionally weak.

2) The Federal Reserve needs to stop losing and printing money.

Image via Pxhere.