Interviewed in this video is Doug Noland a hedge fund industry veteran and financial blogger, of the Credit Bubble Bulletin
Economic research shows that in a recession, the Fed needs to cut rates at least 3% to get any stimulus in the economy…Not a big deal, right? They always cut rates more than 3%. In 2008 they cut rates from 5% to 0% immediately.
How can they cut rates by 3% if they’re only at 1.5% without going into negative territory? Well, they can’t. And at the Fed’s current projections, they still need 2 years until they get the Fed Funds Rate to 3%. That means the Fed is in a race between time and another recession. Which will come first in the next 2 years?
The answer: it doesn’t matter because both will happen. I call this the ‘Fed’s Paradox’. History shows that every time the Federal Reserve raises rates, it causes the economy to slow down or some kind of a crisis happens.
Trump should have leveled w/ the American people day one about the economy, but he did not. Did Dalio signal Trump is a one-term candidate? pic.twitter.com/mu16J9EgVC
— Alastair Williamson (@StockBoardAsset) February 22, 2018
Kaplan’s words come after this week’s report by Goldman Sachs indicated that US debt will turn unsustainable under the Republican leadership. … one of the largest ratings firms in China, Dagong Global Credit Rating, cut the US sovereign rating from A- to BBB+ on concerns that the country can fail servicing the debt. Peru ..
Lexington Herald Leader–17 hours ago