Let's debate interest rates.......Trump vs Powell who is correct?

13,786 Views | 213 Replies | Last: 15 days ago by Logos Stick
Krombopulos Michael
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10:10a, 7/16/25


I know my insurance jumped from $6000 to $10,000 a year over the same time period. I guess they missed my input in the survey.....
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LMCane
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In reply to TXLandAg • 10:11a, 7/16/25
TXLandAg said:
halfastros81 said:
I honestly think Powell is right. Rates are not historically high and I'd prefer to make sure inflation is below target before they drop rates .

So why did he lower it before the election?

THAT WAS DIFFERENT!!

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Sims
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In reply to Krombopulos Michael • 10:14a, 7/16/25
Krombopulos Michael said:


I know my insurance jumped from $6000 to $10,000 a year over the same time period. I guess they missed my input in the survey.....

Your insurance went up $30,000 to $50,000 total over a 5 year period?
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Logos Stick
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In reply to Krombopulos Michael • 10:16a, 7/16/25
Krombopulos Michael said:


I know my insurance jumped from $6000 to $10,000 a year over the same time period. I guess they missed my input in the survey.....


It's probably some substitute goods stuff. For example, people opting for cheaper catastrophic policies that don't cost as much and cover way less.

That's what they do.

For example: if steak gets too expensive, people might buy ground beef instead. The CPI basket might adjust to reflect that, showing a smaller price increase than if steak had stayed in the basket.

Presto... inflation rate goes down.
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halfastros81
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In reply to LMCane • 10:17a, 7/16/25
I answered him BTW . My answer was I don't know why he dropped rates in 2024. I presume it was due to pressure from the left and if so that was clearly wrong . I also think it'd be wrong to lower rates now due to pressure from Trump. Rates shouldn't be lowered before inflation is in the targeted range imo.

I think Powell is a biased guy. I still don't see the case for lowering rates at this point.

I am a 3x Trump voter in the general POTUS election . I think he's wrong on this tho and I don't really appreciate his comments about " prices are low ". We continue to see inflation at almost 50% above target rates following years of inflation waaaay over target rates . How do reconcile that with "prices are low"?
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Krombopulos Michael
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In reply to Sims • 10:19a, 7/16/25
6000, 8500, then 10000
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Sims
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In reply to Krombopulos Michael • 10:24a, 7/16/25
Krombopulos Michael said:
6000, 8500, then 10000

I'll assume that is not a program for you/your family and you're giving us a employer group number. Otherwise, wow.

Even our group coverage with BCBS has been a rate pass, decrease, rate pass the prior three renewals.

Also, that CPI metric appears to not be what we think intuitively that it is - and mostly consistent with Logos' comment.

Quote:
The pricing of health insurance in the Consumer Price Index (CPI) is difficult. Health insurance can be viewed as a composite good. The total price of health insurance is reflected by the insurance premium, but much of that premium is used to indirectly purchase medical goods and services on behalf of the beneficiary. The total insurance premium includes these indirectly purchased medical goods and services, as well as services provided by the insurance company (such as claims processing, risk protection, and negotiating with providers). The U.S. Bureau of Labor Statistics (BLS) prices these two components of the total premium separately in the CPI, and the CPI for health insurance measures only the price of services provided by the insurance company. The current method for pricing health insurance in the CPI is referred to as the "indirect method." This method contrasts the "direct method" for pricing health insurance, which prices the total insurance premium and is used in the BLS Producer Price Index (PPI).


Appears to me that graph is capturing the premium component of administrative functions within the insco rather than the premium component of services purchased (medical care etc) on behalf of the insured.

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Petrino1
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10:39a, 7/16/25
https://www.bloomberg.com/news/articles/2025-07-16/trump-likely-to-fire-powell-soon-white-house-official-says?embedded-checkout=true
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Im Gipper
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11:27a, 7/16/25

I'm Gipper
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jamey
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11:31a, 7/16/25
10 year price dropped 1% on news
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flown-the-coop
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In reply to Im Gipper • 11:43a, 7/16/25
Yea that was a goofy one. He then said it was Biden who extended him but he seems to not want to own the original appointment.

I am certain he would say that it was a bad recommendation that he should not have supported, but there is no getting around his original appointment.

Now, the fiasco of the $2.6 billion and growing reno of the fed HQ seems to have some legs, or at least some issues to be explained. Powell evidently asked for an IG review so he can appear to be on top of it.

Not sure how it costs more to renovate a building than to build a state of the art 80,000 seat luxury sports stadium, but who knows. Bring back BigBallz to look into it.
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infinity ag
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12:19p, 7/16/25
I don't want inflation but I am hearing that if Trump/Powell reduce rates, that will juice up the insipid job market.
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infinity ag
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In reply to Im Gipper • 12:21p, 7/16/25
Im Gipper said:



haha I had not realized that Trump appointed Powell.


Quote:
Federal Reserve Chairman (2018present)
President Donald Trump nominates Powell in November 2017

Powell takes the oath of office, administered by Randal Quarles, as chair in February 2018
Powell testifies before the U.S. Senate Committee on Banking, Housing, and Urban Affairs in 2018

On November 2, 2017, President Donald Trump nominated Powell to serve as the chairman of the Federal Reserve, replacing Janet Yellen at the helm of the central bank.[40] On December 5, the Senate Banking Committee approved Powell's nomination to be chair in a 221 vote, with Senator Elizabeth Warren casting the lone dissenting vote.[41] His nomination was confirmed by the Senate on January 23, 2018, by an 8413 vote.[4] Powell assumed office as chair on February 5, 2018.[42]

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jamey
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12:21p, 7/16/25
I think Trump leaked news of firing Powell on purpose, saw the bond market react opposite to his wishes and so it's now off


CPI data is ticking up as expected. I don't see how you can reasonably expect the fed to cut rates unless something else breaks.

Rates were previously cut when cpi was heading down. Now it's heading up
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Krombopulos Michael
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12:22p, 7/16/25




thats one way to get rid of the guy he appointed.

only the best people......
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Krombopulos Michael
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In reply to Sims • 12:25p, 7/16/25
Why don't you just post the name of your healthcare insurance brokerage?

Seriously, the guy I have sucks.....


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Sims
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In reply to Krombopulos Michael • 12:35p, 7/16/25
Baldwin Group is our benefits broker.

Our loss ratio is fairly low so we do have a good bit of influence on the rate just from claims...but I also think they do a really good job on renewal negotiations with the insurers.
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Scientific
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In reply to LMCane • 3:04p, 7/16/25
More than one thing is true--rates shouldn't have been so low for a decade post recession. Tanking them in 2020 created a worst mess, and raising them 50bps last year was a fleeting moment. It had no major impact, other than to Powell's credibility as unbiased. All that aside, Trump is asking for more than just 50bps.

We're now so accustomed to pulling the lever on rates so often, will we ever allow the markets to settle and sort itself out?
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Krombopulos Michael
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8:04a, 7/21/25


Sellers praying for relief, buyers waiting for price capitulation

Will at 25 BPS cut unlock this.....Probably not but it sounds like a good idea


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aggie93
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In reply to BoydCrowder13 • 10:08a, 7/21/25
BoydCrowder13 said:
Independent Fed is a good thing. Politicians are always going to be focused on short-term wins to the detriment of the country long-term.

That sounds great in theory but in practice they are not. Powell is a partisan and the Fed being politicized is inevitable because of human nature.

As for the OP it's kind of a trick question. If you want to look at things from a purely economic perspective you can certainly argue we shouldn't lower rates but as has been mentioned the Fed is political and lost any credibility under Powell by how he acted during Biden. You can't have a Fed Chair that operates to be politically advantageous regardless of consequences under one President and then suddenly become a sage of financial discipline under another. Essentially Powell wants Trump to pay the price for all he did to prop up Biden.

The larger reality imo is the key to overcoming our financial woes depend on 2 things more than anything else. First is growth and second is spending cuts. If you have growth it takes pressure off of government spending and revenue. If you cut spending it closes the gap on the deficit. Raising rates and taxes works against both of those things. There are logical arguments for both but to me the best path is growth plus spending cuts. Of course the issue is those cuts are very painful to accomplish as we have seen.

What doesn't make sense to me is to keep rates high or raise them and hurt growth. It's also going to raise the debt significantly when it is refinanced and going to cause chaos in the financial markets as they have bonds from when the rates were insanely low that are going to crush some companies. In the end you would have a recession which would kill revenue and result in Dem wins at the ballot box and the death of the Trump agenda. Dems don't even pretend to care about the economy and are living in some socialist insane fantasy that will destroy everything.

It's all about picking the lesser of 2 evils. I'd rather grow the economy and fight for cuts anywhere you can. The Fed has to keep rates low in order for that to work.
"The most terrifying words in the English language are: I'm from the government and I'm here to help."

Ronald Reagan
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tysker
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In reply to Krombopulos Michael • 11:06a, 7/21/25
Krombopulos Michael said:


Sellers praying for relief, buyers waiting for price capitulation

Will at 25 BPS cut unlock this.....Probably not but it sounds like a good idea



Lower rates mean higher prices. Higher prices may induce the Boomers to liquidate their homes and move into smaller (and cheaper?) elder care facilities, but for those of us still working, selling your home means having to buy another high-priced home somewhere else. I'm not sure that is really going to be 'unlocked' here.

A better and more sustainable solution is to make it easier to build. Adding supply to the market with less zoning, fewer restrictions, and more YIMBYism is working throughout TX and FL, as seen in your tweet/x.

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Krombopulos Michael
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12:51p, 7/21/25

Quote:

Fed Chair Jerome Powell hit with criminal referral by House GOP Trump ally

Rep. Anna Paulina Luna, R-Fla., is referring Federal Reserve Chair Jerome Powell to the Department of Justice (DOJ) for criminal charges, accusing him of two specific instances of lying under oath.

Luna is accusing Powell of perjury on two occasions, according to a letter to the DOJ first obtained by Fox News Digital.

It comes as conservative Trump allies continue to demand that Powell, a Trump appointee himself, be fired before his term expires in mid-2026.

https://www.foxnews.com/politics/fed-chair-jerome-powell-hit-criminal-referral-house-gop-trump-ally





Oh my....we have a **** show now.

Trump REALLY wants those rate cuts NOW.
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Trajan88
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11:05a, 7/22/25
$2.5 billion for "renovations."

Come on.

How much would it have cost to raze the existing building and construct new? $400 million? $500 million?

How many work in that building... physically sitting at a desk, crunching numbers and writing reports?
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Krombopulos Michael
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In reply to Trajan88 • 12:01p, 7/22/25
It's got to include a datacenter, the tech infrastructure, and a mini-nuke reactor to go along with it. No way you could spend $2,500 Million on a regular old commercial office building.

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Krombopulos Michael
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12:01p, 7/22/25
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Kansas Kid
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In reply to Krombopulos Michael • 12:50p, 7/22/25
Krombopulos Michael said:
It's got to include a datacenter, the tech infrastructure, and a mini-nuke reactor to go along with it. No way you could spend $2,500 Million on a regular old commercial office building.


This is the Federal Government. I am surprised it isn't $5,000 million. Go show me any similar project that they delivered on time and on budget. Just further proof the government is a giant sinkhole for waste and fraud.

Trump spent $1.7MM just redecorating the White House in 2016. Obama spent $1.6MM to do the same thing. While small potatoes in a multi trillion dollar governement, it just shows how expensive things are when paid for by We The People.
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Krombopulos Michael
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1:17p, 7/22/25


Nevermind. Twitter source announcing Powell's resignation.


Fake news.
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Rockdoc
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In reply to Krombopulos Michael • 1:20p, 7/22/25
Krombopulos Michael said:


Nevermind. Twitter source announcing Powell's resignation.


Fake news.

You sure about that?
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MouthBQ98
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1:21p, 7/22/25
Appears to be legit news.
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Ellis Wyatt
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1:25p, 7/22/25
**** Powell.
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aggiehawg
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1:26p, 7/22/25


Gets very uncomfortable when Sec Treas and Fed Chair are on completely different pages. It was only a matter of time.
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Rockdoc
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1:27p, 7/22/25
It IS fake news! An AI generated letter.
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MouthBQ98
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1:27p, 7/22/25
And it is now confirmed fake…. Jeez..
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Logos Stick
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1:27p, 7/22/25
Not good.
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TRM
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1:31p, 7/22/25
Bessent gave him a vote of confidence for now just this morning. He wasn't resigning today.
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