Economics: Why An Interest Rate Cut Would Make No Sense

(Drivebycuriosity) - Today`s US job market report shows that an interest rate cut would make no sense. The US economy created 224,000 new jobs in June, a sign that the US economy is still solidly growing and that all the recession calls are unfounded. President Trump`s trade war seems to harm manufacturing but the much bigger service sector (about 80% of the economy) is mostly unfazed.

I think that the Fed should not cut her interest rates in the coming months. The US economy doesn`t need more monetary stimulation. An interest rate cut could give a wrong signal, discourage investment, weaken the dollar and rekindle inflation.