BySteve Forbes,
Forbes Staff.
Critics, including President Trump, charge that the Federal Reserve is keeping interest rates too high. Others say the Fed is correct and that inflation is a threat. Here’s why both views are right—and what that means for the market.
In a recent interview with the New York Times the Federal Reserve’s newest governor, Stephen Miran, declared that the central bank should cut interest rates by 50 basis points at its meeting next month. He pooh-poohed concerns about inflation, warning that recession—not a surge in prices—is the immediate threat. Meanwhile, the Fed’s current boss, Jerome Powell, threw cold water on the idea that even a small reduction was a sure thing. Too much uncertainty about the state of economy, he averred.
President Trump and Miran are right that the cost of borrowing money is overpriced. Our rates are higher than those of Japan and the EU and are about the same as Britain’s. This is absurd, given that our fundamentals are so much better than those economies’.
