This is basically self inflicted, as usual messing up in the Middle East always ends up with consumer paying the price for their ruler's stupidity

"Oh no, my drinking water tastes like crap after I pooped in the well"

Except the person doing the pooping doesn't drink from the same well as he's got his own private reserve supply.

But unlike in the old days, US wins from higher prices. Even consumers wins (because they make more money on average, and their imported goods are cheaper because balance of payments shifts in US favour because of oil exports).

Voters are furious because of psychological factor of gas prices (purely psychological, it has nothing to do with economy or people's purchasing power). It bites politician's asses real hard.

So, Trump undermined himself by launching that war - but others are fine.

Do they make more money on average? Does any additional income cover the increase in cost of living? Becoming psychologically poor is much harder than becoming psychologically rich. I doubt that balance of payments goes anywhere near your average Joe’s pocket.

It absolutely does because balance of payments = exchange rate, and average Joe is poor and consumes disproportional part of imported goods vs the rich.

All of that depends on the strength of the Dollar, If the US is to deindustrialise as it aims too it needs a weak dollar. Secondly theres the Petro-dollar which depends on the Middle East states Reinvesting their profits in the US to keep the dollar strong I don't know if you checked but I don't think they are going to be making any money in the near term. So looks like the dollar will be falling anyway. Further to that there is the global debt system which largely relies on buying US treasuries if countries get squeezed by the coming inflation, theres the chance these get dumped on the market and if that happens I believe the term is "Well, Fuck."

If the US is to deindustrialise as it aims too it needs a weak dollar.

Typo for "reindustrialize"? Is the idea to move people from well paying comfortable services jobs to uncomfortable repetitive lower paid factory work by forcibly lowering their standard of living?

We can’t afford healthcare because they revoked the subsidies but at least we now also can’t afford gasoline too!

While this isn't the best way to address the issue, the US is way too dependent on gasoline/diesel for transportation. It's not sustainable.

Being unsustainable isn’t the same as breaking within the lifetime of the people making the decisions. The average US senator is 66, and that’s young compared to the current Supreme Court or the sitting President.

We can’t afford healthcare because they revoked the subsidies but at least we now also can’t afford gasoline too!

But we can easily affort 500+ million per day for faraway foreign wars! That, no problem.

Also apparently a $5000 “dividend” for everyone if we just “do the right thing”. I thought you had to be profitable to pay a dividend, but apparently not. Oh also, that $1.5T will magically not add to the debt or come from tax dollars.

Isn't that the textbook definition of buying votes?

Apparently not.

In Brown v. Hartlage (1982), a Supreme Court case where a Kentucky county commissioner promised to reduce his salary if elected, the Court unanimously drew a line between policy promises and vote buying. “A candidate’s promise to confer some ultimate benefit on the voter, qua taxpayer, citizen, or member of the general public, does not lie beyond the pale of First Amendment protection,” Justice William Brennan Jr. wrote. Given that precedent, Trump is almost certainly within the bounds of the law (you might remember Elon Musk wasn’t charged for handing out $1 million checks to people during a campaign rally in Wisconsin in exchange for “taking the time to vote.”).

https://www.readtangle.com/trump-dividend-midterm-promise/

This is an asinine decision that essentially makes vote buying totally legal. We see this trick with the recent Supreme Court decisions that essentially make racial gerrymandering legal again by just making the crime impossible to prove by accepting any other justification at face value.

I mean, if you really believe that, then no politician would ever be able say something like "I'll work to get you free health care".

Eh, how is this self-inflicted, when you have a radical has-been-empire blocking a global arteries by waging relentless proxy wars. Stop it with the "only white people can be actors on the global stage"-ism, the us basically clashes with Iran once every president (directly or indirectly) - and not by choice.

It was blatantly obvious Iran would do that if attacked. This has been known for decades.

The only thing previously stopping them holding the strait "hostage" was the threat from the US of doing an "Operation Praying Mantis v2" and destroying their navy and attacking them.

And when the US did that anyway, they had nothing to lose.

And Iran attacked. Relentlessly every day up to that war. It does not get into western news much. But in Lebanon. In Yemen. In iraq. In ghaza. There proxies marched and attacked. The west is to weak, to wait for another pearl harbour.

I am no fan of Iran but the white people in question literally went there to wage war with the so called has-been-empire and got their butts spanked, despite EVERYBODY warning them for years this would have been an unwinnable war

The government has fully lost control of the long-term Treasury yield - this is their attempt to bring it back under control.

I expect to see the president fire the Fed, nationalise it and make the rates negative, collapsing the economy.

The yield curve has always been controlled by the Fed, and this remains the case. No one has lost control. The yield curve is the time path of short run rates, adjusted by risk. So, for example, if the market thinks inflation will rise -- for example because of a foolish war against Iran -- then they will sell the long dated bonds because they know the fed will hike rates in the future, making the long dated bonds less valuable, and they want to get ahead of that. If, on the other hand, they think inflation will be too low, they will bid up the longer dated bonds because they expect the Fed to lower rates in the future, making the long dated bonds more valuable. The entire bond market is fixated on trying to guess what the Fed will do next, so that is why they peer at the economic data and try to guess in which direction the Fed will move and when. That is the opposite of "losing control" of the yield curve.

The problem is Bessent trying to control something that he has never had any control over, by jawboning the market and doing silly things like trying to intervene. Bessent is the Treasury secretary. Treasury does not, and never has, controlled the yield curve. Whatever games he plays buy buying and selling bonds has only a short term psychological effect on the market, and soon people brush it off.

The Fed controls the yield curve, not Treasury.

Bessent is a hedge fund guy that is really not well suited to the role he is playing. Now, they want to put Bessent in charge of economic sanctions against Iran, when we shouldn't even have any sanctions against Iran. The US is sanctioning the world's top oil producers, and then complaining about oil shortages.

Sanctions against Iran play an important and justified geopolitical role. Iran has been a complete menace to the Middle East by propping their proxies and de-facto taking over at least 5 different countries and serving as one of the supporting pillars for Russia in its war. We have not seen the last of this war, too early to call the results. Trump is not backing down and we may see a Venezuela like situation at the end which would have massive geopolitical implications (of course there are other much less favorable outcomes too).

I think your phone autocorrected Israel to say Iran. Also you provided no evidence for your claim, you just kept repeating the claim over and over instead of backing it up.

Iran is the source for the Islamic justification for suicide bombing (suicide is forbidden in the Quran and thus 'innovation' was needed to justify it). That alone puts immense amounts of blood on their hands. They invented this justification for their own religious and geopolitical aims (getting the US out of the ME). They are interventionists who want to be the spiritual centre of Islam, they are the opposite of passive actors in their region.

The bigger question is whether the other Gulf states (that we ally with or support) are any better and whether or not they deserve sanctions too. The West is clearly not in a place within the ME to preach morals, but that doesn't mean countries like Iran don't deserve sanctions.

This administration wants lower rates. Also this administration does everything it can to increase inflation such as tariffs and starting another endless war in the middle east.

The administrations choices are fairly binary now.

Inflate away the $40Trillion+ debt they can never pay back

Or

Hard default on the debt, and be the one holding the hot potato as the union breaks up.

Fed is trying to thread the needle between the two and keep the music playing as long as possible.

There is one obvious choice here, the policy is inflation and always has been.

yet many "third world" countries managed to pay their debts just fine. some even more than once in recent history.

American exceptionalism even in failure?

From the adminstration

Fed independance is about tempering that policy so UST still has buyers.

Fed policy is explicitly controlled inflation (2% target).

Fed is trying to thread the needle between the two

Not really, inflating it away is the only possible choice.

You give the people in charge too much credit regarding any long term thinking or goals in general.

Or thinking

The goal is to win the next election but I think the populace is to blame for this more than anything.

The populace is who is too interested in winning politics as a sport that the politicians have really no choice other than to focus entirely on winning the next election.

If the voters treat politics as a constant form of sports entertainment, constantly checking the latest news and events, then voters are actually the fundamental problem as to why the politicians can not do anything in terms of long term planning.

I always hear this accusation of people treating politics like sports, but what do you want? It's a FPTP system, which favors entrenching two parties. In order to maintain the backing (funding, importantly) of one of those two parties, candidates can't fall too far out of line. If you can't get your outsider preferred candidate above 50%, considering there is also likely another main-party candidate with significant policy overlap, you get nothing.

If you want to reduce the spectacle, replace FPTP with a better system that eliminates the need for primaries, and get rid of Citizens United. Good luck.

Or you could, you know, raise taxes. There’s policy solutions to these problems they just happen to be painful in a way that is easier to point to.

The only reason we have to choose between inflation and expensive loans is corporate profits can't ever go down. It's perfectly possible to freeze margins and ban increasing prices unless a business proves their costs went up, but to enforce that you would need to a) have a competent administration and b) not be scared to piss off your billionaire donors.

Allowing stock buybacks and not taxing dividends heavily is a choice. Not breaking up monopolies is a choice. Inflation comes down to high oil prices and corporate greed powered by weak competition. Starting wars is Trump's fault. Subsidizing big oil instead of setting price controls is also his choice, as is doing everything he can to slow down EV adoption that would reduce demand.

There are a lot of SKUs to regulate. The cost of the bureaucrats checking the requests for basic "my price is going up because my inputs went up" price rises would be staggering. Also it would disincentives any price drops being passed on.

Incoming unhinged POTUS rants and demands in 3…2…1…

But you know what, I’m glad to see that the fed is still operating independently. The doomer in me thought they’d fold to Trump, especially right before the midterms.

At this point, people don't even care about his rants.

This is one thing that gives me a sliver of hope for our future relations as European, please keep 'civil disobedience' up to these unhinged oligarchs for better future of us all.

He didn't, oddly enough. He said he "disagreed with it" but had confidence in the central bank. Basically that he had no problem with it. This suggests to me he thinks he'll benefit from it somehow.

And the dot plots suggest no rate decreases until 2028.

Meanwhile Bessent is buying long dated bonds and selling short dated, betting the yields will go down.

Dear US, try not to take the rest of the world with you when. You implode.

So Trump spent weeks on a fake fraud investigation into Powell to try and force him out because he would not cut the rate, fails at that, then finally gets his choice in place and the dude raises rates almost immediately?

This wont do absolutely nothing whatsoever to bring down inflation. Interest rates don't open the Straight of Hormuz, don't increase production of oil or any other commodities. the only way interest rates affect anything is when they meaningfully decrease investment, consumption, in other words a recession or depression.