| Everybody I speak with on both sides of the aisle agrees that we need to get our spending down to 3% of GDP. But politics is standing in the way of making good decisions. The idea of compromise is out. I think we all agree that we’re in need of a big renovation. The question is how that renovation gets done — and there’s a lot of fighting over what that renovation might look like. My advice: Politicians on both sides need to agree on a mutually acceptable “worst case scenario” that cuts spending to the level we need, if a broader agreement can’t be reached in the near future. |
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Should the Federal Reserve Cut Interest Rates?
2025-06-20
The Fed is in a very difficult position as it tries to balance the benefits of cutting interest rates with maintaining the value of money.
Right now, there is a great deal of uncertainty throughout the economy, along with a deterioration in sentiment.
Combine that with political pressures and the realities of our upcoming debt service payments, and you have this value of money conflict.
So changes in the monetary policy — especially if the cut is too aggressive — could lead to a period of great concern.
My advice: Watch the yield curve. If you see long rates rising alongside downward movement in the dollar and rises in gold, you’ll know there’s a movement out of bonds. Because the value of money matters a lot.
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