Marketplace Rate cut? So what?
40 snips
Sep 23, 2025 
Justin Ho, a Marketplace reporter known for his insightful economic analyses, joins to discuss significant Fed developments. He highlights Stephen Miran's argument for slashing interest rates by two percentage points, which could boost spending but inflate prices long-term. The discussion covers the resilience of U.S. economic growth amidst uncertainties, the urgency for electric vehicle buyers before tax credits expire, and the unique housing challenges faced by traveling nurses in a fluctuating market.
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Big Rate Cuts Have Immediate And Delayed Effects
- A rapid series of Fed rate cuts would push short-term Treasury yields down sharply and encourage borrowing and spending.
- But higher inflation risk could force the Fed to hike again, raising long-term yields and borrowing costs later.
Lower Short-Term Yields Change Consumer Behavior
- Falling Treasury yields from Fed cuts lower credit card and student loan rates quickly and reduce returns on savings.
- Increased spending from cheaper credit can boost growth short-term but risks rekindling inflation and long-term borrowing costs.
Inflation Expectations Lift Long-Term Yields
- Higher inflation expectations would raise long-term bond yields as investors demand compensation for future rate hikes and lost purchasing power.
- That pushes up mortgages and corporate borrowing, slowing investment and hiring.
