[ilikerashers]

For all the drama in US Politics, you have to admit they run extremely well economically. Quick to keep rates high, good forecasting, good trade policies, good energy policies.

Europe is like a kid copying the US homework, trying to make the equations work.

[Nursie]

> Quick to keep rates high

Well, compared to most other countries I know about, US rates work a little differently.

Homeowner mortgages are (AFAICT) almost all fixed for the full term of the loan. So a rate hike doesn't immediately take money out of the pockets of a large proportion of the population. It may slow new home finance agreements, and affect a lot of other credit agreements, including the ability of business to borrow, but it doesn't kick a huge number of people right in the domicile.

Whereas here in Aus and in the UK (two places I've held mortgages) fixed terms are only available on a relatively short basis (1-5 years) and people won't take them out at all if they feel the rates are already a little elevated (like now), as there are penalties for refinancing in the fixed period. So interest rate rises directly impact people's pockets and threaten their housing stability.

So over here mortgage holders really do hate rate rises and feel personally aggrieved when the central bank raises them.

This situation conceivably makes tackling inflation easier - public spending plummets when rates go up - but it is massively unpopular.

[bwb]

The FED has done an amazing job and are utterly filled with the smartest people in the field. I love watching the q&a with members as they give such detailed and informative answers on just about everything. Worth watching if you are an econ nerd.

[realusername]

I'd say that it's more a statement of China doing significantly worse than expected more than anything else.

You can be sure that the day the USD isn't viewed as the global currency, all this printing will come bite back hard and probably cause a collapse.

[ilikerashers]

Seems like China will do as well as the US lets it. It has little domestic consumption and is reliant on exports to the US.

Maybe China will have strong consumers in the future but then it'll have to ensure it can compete with US wages which erodes its competitiveness.

House always wins.

[realusername]

I personally think it's due to Xi Jinping idiotic economic policies more than anything else, sure US policies helped but it wouldn't work either way.

They based their economy way too much on export and real estate to grow at a normal rate. The worst covid lock down in the world certainly didn't help.

The country is lagging behind because of their contradictions.

[ilikerashers]

I agree with that. The thing that made them grow so quickly is now going to force them into reliance.

Encouraging consumption by creating more welfare programs, spreading corporate wealth to citizens via share schemes etc would be a way of changing this but I don't see this fitting into the Marxist production machine.

[Moto7451]

The Federal Reserve (The Fed) is supposed to work independently of the political process which is why we have the same Fed Chair as we did during the Trump years. Ironically this means the Fed Chair keeping rates high is the same one that set a zero base rate. The various Fed leaders operate under the same guise of serving outside the political cycles.

They’re still human so they can be swayed by Presidents and obviously have their own political leanings. In general the ability to not listen to politics allows them to make choices that are inconvenient for an election cycle but good for the US economy.

[a_wild_dandan]

FYI, Trump has vowed to purge the executive branch of unloyal employees, aiming for unitary rule during his 2nd term. It’s unclear how much of this his conservative SC majority will allow, but…the norm of stable, institutional independence might be gone soon.

[Moto7451]

Sure, Supreme Court volatility opens that up. The last time his Chairmanship was under threat it was unclear if he could be removed by Trump simply because Trump wanted to so it would require the usual "Do the thing", get sued, take it to the Supreme Court. Such actions aren't instant even for the President, especially if he is busy having them settle his other matters he wants to bring to them.

https://www.pbs.org/newshour/show/does-the-president-have-le...

Also, removing Powell doesn't let any president put someone in who will set whatever rate they want. It must be a member of the Board, of which two are his nominees from his term. They also don't have to listen to him.

When it comes to setting rates, Powell is chairman, not supreme leader. The FOMC sets rates and that is a group of twelve.

https://www.investopedia.com/terms/f/fomc.asp

Given Trump wouldn't see sworn in until 2025 and would have the usual problems of any new President rather than the benefit of a second term, and as Powell was confirmed in 2022, under current case law, Trump at best simply gets to nominate a new chair a number of months before he'd do so in 2026.

Powell's single 14 year term on Fed board ends in 2028 so there will be a new Chair no matter what after that.

While from a Political standpoint, I don't like what he may do, I am ok with how this is setup. This is not as easy as simply replacing his cabinet members and that is a good thing.

[nebula8804]

At least we can replace all those Biden stickers next to the gas pumps that say "I did that" with Trump stickers... :/