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  • Interest Rates in the US

    From Joseph Pereira@1:124/5016 to All on Monday, December 01, 2025 07:04:58
    The Fed wants to lower interest rates, but is currently facing the problem that market interest rates are approaching the upper end of the Fed's interest rate range. This gives the Fed no room to actually do anything about lower interest rates. If the Fed did lower interest rates, it would become clear that the market, not the Fed, determines interest rates. Market interest rates would then actually exceed the Fed's interest rate range, and the Fed would lose its credibility.

    For the past 100 years, the Fed has always acted as if it were setting interest rates. They did this by always setting a range within which the market could move. The Fed could then continue talking and press releases to try to persuade the market to stay within the range. That worked very well for the Fed for a long time.

    In recent years, this has become increasingly difficult, and interest rates recently exceeded the Fed's range.

    If this continues, there will be no Fed interest rate cut, as Trump desired.

    .
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