The Fed is Stuck On Interest Rates, Unable to Do Anything
Stuck in Glue
The Fed is stuck in glue. It did not change interest rates. Nor did it change much of its announcement as the WSJ Fed Statement Tracker shows.
Sarcastic News of the Day
Effective Lower Bound
For discussion of the Effective Lower Bound (the point at which lowering rates further is counterproductive), please see:
- June 4, 2019: Powell Ready to Cut Rates to "Effective Lower Bound" via "Conventional" Policy
- September 25 2019: In Search of the Effective Lower Bound
Two Inflationary Tail Risks For US Investors
The Fed is stuck and will not lower rates below zero nor can it raise them without killing housing.
For discussion please see Two Inflationary Tail Risks For US Investors
Meanwhile, the bubbles keep getting bigger increasing the odds of a deflationary collapse.