The Good, The (Not So) Bad & The (Relatively) Ugly

Our Roaring 2020s economic scenario and expectations for inflation and the labor market suggest that the Fed probably shouldn’t cut interest rates this year, although one cut might be warranted if upcoming inflation reports are more subdued than we expect. Yet a rate cut next week, after the FOMC meets Wednesday, is practically a foregone conclusion. Stimulating an economy that doesn’t need stimulation won’t create more workers to address the undersupply that’s constraining the demand for labor, Dr Ed explains. Plus, cutting rates when it’s not necessary could cause stock prices to melt up and destabilize the broader financial system. ... Plus, a look at the debt crises attracting Bond Vigilantes’ attention in the UK, France, and Japan. ... Also: Dr Ed reviews “Happy Face” (+ +).