The Federal Reserve slashing interest rates this year, which it's anticipated to do, would provide voters temporary financial relief with long-term negative effects, economist says.
The Federal Reserve is anticipated to slash interest rates this year ahead of Election Day, which will likely lead to a superficial boost to Americans feeling wealthier ahead of casting their votes, though the cuts would have detrimental effects in the long run, experts say. "I think superficial is exactly the key because one of the things that happens when you cut interest rates is that you do get a temporary boost to the economy driven by an ease of access in terms of debt.
The central bank expects to cut interest rates three times in 2024, with Antoni citing famed economist Milton Friedman’s comparison of inflation to alcoholism, where slashed rates will give consumers a quick buzz, with "disastrous" consequences. "Milton Friedman… used to compare it, this whole phenomenon, to alcoholism where, you know, the detox process is very painful, but in the long run it leads to health.
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