E=MC(No Rate Cut) Squared: The Fed's Inertia in a Trumpian Universe

Relativity of Rate Cuts: A Matter of Perspective

Ach it seems the universe is playing tricks on us again! This week the Federal Reserve much like a stubborn photon is expected to hold its position on interest rates. President Trump bless his heart believes 'NO INFLATION THE FED SHOULD LOWER ITS RATE!!!' A noble sentiment but alas reality is more like my theory of relativity – it all depends on your frame of reference. And as I always told my students 'The only thing that interferes with my learning is my education'. Perhaps the President should take a course in Econ 101.

Trade Wars and Inflation: An Entanglement of Economic Particles

These new trade policies or should I say 'trade tribulations,' are like adding a cosmic constant to the inflation equation. Economists fear these tariffs could lead to a widespread price increase complicating inflation forecasts. It's a bit like trying to measure the speed of light while riding on a merry go round. The consumers? They're always the ones paying the price as my friend Eugenio Aleman so eloquently put it. It reminds me of the saying 'The definition of insanity is doing the same thing over and over and expecting different results'. I suspect the markets may be a bit insane.

Consumer Crunch: A Black Hole of Debt?

Many Americans are feeling the squeeze squeezed by high prices and even higher borrowing costs. This potential inflation from a costly trade war is like a gravitational pull on household budgets not good. Greg McBride from Bankrate says that ‘Uncertainty rules amid a trade war and the ever changing landscape of tariffs.’ Well I always said that 'in the middle of difficulty lies opportunity'. Perhaps this is a chance for consumers to get creative with their finances but not by trying to bend the laws of physics of course.

Credit Card Catastrophe: A Variable Universe of Rates

Ah credit cards a modern marvel of variable rates. Most cards dance to the tune of the Fed's benchmark and with rates hovering near 20% it's not a waltz but a tango with the devil. Matt Schulz of LendingTree claims that banks are nervous which may be true. The banks are indeed nervous which is why they raise interest rates to minimize risk. 'It has become appallingly obvious that our technology has exceeded our humanity' especially when it comes to credit card debt. Total credit card debt and average balances are at record highs. Maybe someone can find a way to turn gold into lead ala opposite of alchemy and pay it off.

Mortgage Mayhem and Auto Angst

Mortgage rates are tied to Treasury yields but Trump's tariff plans have created a drag. Auto loans? A similar story. While rates haven't changed much car payments are rising thanks to those pesky tariffs. Ted Rossman calls it a 'pain in that market.' Well I always thought pain was temporary but physics were forever. Still this situation is quite a conundrum. I often find myself thinking 'The more I learn the more I realize how much I don't know'. Perhaps we need to go back to riding horses.

Savings Sanity: A Safe Harbor in the Economic Storm

On the bright side high yield savings accounts still offer above average returns paying as much as 4.5%. So that's good! These rates tend to correlate with the federal funds rate. McBride suggests boosting emergency savings and eliminating high interest debt which is something I can agree with. In times of economic turmoil being frugal can be like a 'splinter in the mind' but it will lead you to a breakthrough! 'Try not to become a man of success but rather try to become a man of value' and save save save!