Spencer Jakab

It gives the government less room for maneuver.

I mean, just think if there's a pandemic or a recession, you already have a large deficit.

You already have a lot of borrowings.

You can't just necessarily write a blank check.

And it squeezes the actual spending power of the government.

You know, as more and more money is dedicated just to servicing the debt, there's less money to spend on actual things the government does.

The budget deficit as a share of GDP today is at a level that you typically only see during deep recessions when the government is trying to sort of pump up the economy and get us out, not in the middle of a boom like we're having now.

Well, we'll have a couple of more jobs reports before the March meeting.

They'd likely have to see something dramatic or see something elsewhere in the economy.

You know, for example, manufacturing surveys could be very soft, industrial production, durable goods orders, things like that.

But we have not seen signs of that so far this year.

It shows us that it's functioning fairly well because there is consensus.

The two officials that dissented, each of whom asked for a quarter point cut, were Stephen Myron and Waller, who's one of the four candidates to be Fed chair.

You know, you're not going to get the job if you're not seen playing ball because Trump is explicitly calling for Fed rate cuts.

So no surprise there at all.

It counts as consensus for any normal meeting.

He was asked about it, but he wouldn't be drawn.

So he was extremely professional, did not allow any of that to distract from the economic message.

The market reaction has been fairly muted.

The decision was very widely expected, and there was nothing really unexpected that came out of Powell's mouth.