manipulation
Seems churlish to dissent from someone who’d just cited my work
favorably, but Michael Donnelly writes in Counterpunch
Continuing its usual election year pattern when Republicans control
the White House, the Federal Reserve Board hasn’t raised interest
rates since the end of June, when the Fed set the rate at 5.25%.
(The rate was raised to 6.5% for 2000’s stolen election. Quickly,
it was dropped to a mere 1.75% for 2002 and 2004.) Now, after
raising the rate steadily since then, the increase was capped in
June. The Stock Market has responded and we’ll be seeing all sorts
of blather about the Dow “reaching its all-time high”–11,722.98– by November 7th. (The Dow is at 11,611.67 as I write this.)
There’s nothing unusual about the Fed’s behavior. After raising
interest rates at 17 consecutive meetings, it was time for a pause.
They seem to have gotten what they wanted - an economic slowdown. Job
growth slowed from about 175,000 a month in the first quarter to
about 120,000 in the last few months, and it looks like we may have
seen the low in the unemployment rate for the cycle. Oil and other
commodity prices have come well off their highs, and the housing
market looks like it’s cracked. The yield curve is inverted - i.e.,
short-term rates are higher than long-term rates - which usually
portends further slowdown (and is a sign that the bond market sees
Fed policy as tight, since the inversion suggests they expect short-
term interest rates will be heading downward soon). If anything, Wall
Street had expected the Fed to pause sooner than June. So they’re not
pimping for the GOP.
Doug