WHAT DOES YESTERDAYS FED RATE CUT REALLY MEAN?

dewontrades1 (28)in #economy • 5 years ago (edited)

Yesterday the U.S. Federal Reserve announced their decision to cut interest rates by 25 basis points. But why?

In media news outlets, government officials have projected from the mountain tops that economy was strong, the dollar was strong, unemployment was low, and stocks were booming. In addition, Feral Reserve Chairman, Jerome Powell, mentioned "we don't see" and "we don't forecast" a recession. A reporter promptly followed Powell's statement with a question about the significance of the 2 - 10 year yield curve inversion, which has traditionally signaled coming recessions. Essentially, Powell vaguely explained that there are other indicators they include and they would act accordingly to keep things from running off the rails.

A private organization that greatly influences the countries livelihood by propping up markets with cheap and inflated dollars must have more transparency. Before the 2008 financial crisis, then Federal Reserve Chairman, Ben Bernanke, assured people of no recession forecasts despite similar indicators that have flashed recently. In my eyes, has became clearer that the central bank, Federal Reserve, has gone into complete intervention to prevent economic slowdown- from my opinion, which would be necessary to allow a correction to free market values and allow production fueled capital to build again.

Instead, the Federal Reserve "tool-kit" of increased money supply and forced lending has continued to grow non-repayable debt and weaken the dollar.

With an increased money supply to lower interest rates, it should encourage consumerism to maintain the economy. My concern is...how will banks survive lending at lower and lower rates?

Partly speculation that rates would continue to lower further and further, and, dropping rates on deposit account which would likely bite savers and their futures..

Screenshot_20190919-140656_Samsung Internet.jpg