Ones and Tooze The Impact of Interest Rate Cuts
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Sep 13, 2024 The conversation dives into the Federal Reserve's anticipated interest rate cut amidst a faltering labor market and recession fears. It examines how these cuts impact consumer experiences, particularly in mortgages and economic expectations. Historical insights into Winston Churchill's decisions before World War II are also discussed, highlighting the political and economic dynamics at play. The podcast weaves together contemporary economic issues and historical parallels, making for a thought-provoking listen.
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Indirect Effects of Rate Cuts
- The Federal Reserve's interest rate decisions indirectly affect consumer borrowing rates.
- Banks' selling of mortgage-backed securities amplifies the effects of rate changes.
Market Expectations
- Market reactions to interest rate changes aren't just speculation, they reflect expectations about the future.
- The Fed's actions are crucial because markets see them as signals about the future economy.
Global Impact of US Interest Rates
- Higher US interest rates have negatively impacted emerging markets.
- Reduced borrowing and increased debt crises destabilize economies politically.