Do you think there are apprehensions that Trump may not be able to push through his spending plans, and this is phasing out the possibility for him to enact a policy, which would reflect in his next year agenda? Without a robust fiscal spending policy in place, it seems unlikely that US economy would rid itself out of the clutches of a slowdown in the long run, even though in the short term an interest rate hike may drive up the US$, due to an covered interest rate arbitrage.
It seems that Trump is somewhat shielded from any debri caused by interest rate hike impositions and could have the last laugh, jeering, “I told you so,” if the economy were to slowdown in case of a hike. Thus, he has to be affirmative on which side to take, because the debate on whether or not to raise interest rates, has assumed a political dimension because the FED stands to lose credibility if it stays pat when job markets have remained solid. Trump also accused Yellen when she was not raising interest rates that could be a market booster but surely counterproductive over the long haul. For example, investment sentiment seemed buoyed with Trump’s plan to reduce taxes, regulation and increasing spending on infrastructure making which does make a solid case for a hike!
After his dismissal of Comey and spilling the beans to Russian Foreign Minister, White House will be probably occupied figuring out how to shackle Trump his unpredictable and potentially hazardous actions, rather than focusing on government plans to stimulate economy.
These measures seek to boost the consumption of companies and households amid the difficult international context due to the coronavirus.
The measures taken do not directly impact individuals or small businesses, but they do seek to support financial policies in order to avoid a deterioration of the financial system.
Aren’t housholds individuals?? The idea of lowering interest rates is to stimulate economic activity and drive consumption. So I don’t understand how raising interest rates will encourage businesses to invest in infrastructure and or development.
Mind you I was agaist the Fed lowering interest rates.
I really don’t follow what you are trying to say but right now absolutely no economy would be thinking of raising rates. On the any Central Banks that still had room to move in the last few weeks has dropped rates to basically 0. (Some have stopped at 0.25 and others like Japan and Switzerland have been -ve for quite some time already. Most places unemployment rates are increasing and economies are going into recession with huge amounts of stimulus being added in to each economy. I wouldn’t expect rates to rise for a while yet.