Slate Money The Fed Rate Cut is a New Beginning
Sep 21, 2024
Mortgage rates have dipped and inflation is cooling down, indicating a fresh start for the economy. The panel discusses the implications of the Fed's interest rate cut on voters and the labor market. They also tackle Trump's bold tax cut promises, questioning their viability. Meanwhile, Tupperware faces bankruptcy but finds new life in the underground sharing scene. Plus, discover how a quirky Japanese invention—bread lamps—has become surprisingly popular.
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New Economic Cycle Begins
- The Federal Reserve's interest rate cut signals a return to normalcy after years of economic volatility.
- This marks the start of a new business cycle with slightly higher rates and inflation.
Rate Cut Interpretation
- Unlike previous rate cuts during economic downturns, this cut aims to normalize rates after inflation control.
- This presents a unique situation where the rate cut can be framed as both positive and negative.
Mortgage Rates and Fed Cuts
- Don't assume mortgage rates will directly follow Fed rate cuts.
- Mortgage rates are tied to the 10-year Treasury yield, not the overnight rate set by the Fed.