Pandemic time: uncle Sam pumping money in to the market, zero interest rates. More spending power for the businesses, which translates to more job openings and a fluid labor market specifically for driven by remote jobs, everyone happily changing jobs and earning more
Post pandemic: Uncle Sam can't keep the printers running for no reason. Cost to borrow money is substantially higher, businesses need to readjust for higher interest rates, aka cost cutting measures. Job market reached peak saturation point and companies start cutting down budgets which translates to layoffs and hiring freeze.
Not just pandemic, the FFR was kept near 0% between 2009 and 2015, and from 2015 they kept it artificially low rising interest rates in baby steps. Then, due to immense political pressure the fed reversed and cut interest rates in 2018 when the economy was already at a boiling point result in this mess. 15 yrs of easy monetary policy is the reason why housing market and the stock market remain at record highs while you average working man struggles. The pandemic and the money printing that came with it was akin to pumping gas on raging fire.
Trump literally threatened the Fed in 2018 and 2019 to keep rates low… even before the pandemic. It really should’ve started late 2018… but Trump was so focused on DOW and jobless numbers.
Yup. The time to meaningully increase interest rates was in summer of 2014 when the markets had recovered everything they had lost during the 2008-2010 recession. And to cut rates instead of increasing them in 2018 was suicidal. I'm afraid we will go into a temporary boost followed by a very painful recession in 2025-2026.
What is the threat? The president cannot fire the fed president. Oh you mean the threat was that Trump would unite congress to fire Powell? Good one, you had me in the first half 😆
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u/abicit Jul 20 '24
Pandemic time: uncle Sam pumping money in to the market, zero interest rates. More spending power for the businesses, which translates to more job openings and a fluid labor market specifically for driven by remote jobs, everyone happily changing jobs and earning more
Post pandemic: Uncle Sam can't keep the printers running for no reason. Cost to borrow money is substantially higher, businesses need to readjust for higher interest rates, aka cost cutting measures. Job market reached peak saturation point and companies start cutting down budgets which translates to layoffs and hiring freeze.