00:00:00
let's just scenario play yes please what
00:00:02
happens if Powell rips in a 100 basis
00:00:04
point cut right now I'll tell you so one
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part which is mathematical is the
00:00:08
interest on the debt goes down we save
00:00:10
300 billion but there's something else
00:00:12
that happens which is the Fed does
00:00:14
control the front end of the curve
00:00:16
meaning how do people borrow money for
00:00:20
small amounts of time from one day to
00:00:22
about two years if you make that cheaper
00:00:24
it's a test that's true as time what
00:00:26
happens is people borrow more money that
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fuels more growth that will end up in
00:00:31
GDP so what actually happens if you cut
00:00:34
rates 100 basis points is not just the
00:00:36
300 but you can get this reflexive
00:00:38
positivity in the economy what that
00:00:40
allows you to do is even if that causes
00:00:43
a little bit more inflation you're
00:00:45
actually growing yourself out of this
00:00:46
whole thing if the numerical
00:00:48
justification is there to lower rates
00:00:51
and it has all of these other positive
00:00:53
externalities for the United States
00:00:55
economy why don't I do it the only
00:00:58
answer is political
