Where were you on 9/11?
It’s probably the one event every American who was then alive remembers.
And by the time you’re reading this, exactly 18 years ago, you’d most likely watched as the Twin Towers collapsed into a cloud of dust and debris.
Later, as the Pentagon was left with a jet-sized, flaming breach.
And then the blackened scar on a Pennsylvania field.
You’ll remember the collective dread. The splintered sense of well-being.
It’s fitting to remember — difficult as it is — the 3,000 people who lost their lives on an ordinary Tuesday in September. The families left behind.
The responders who walked into peril while others fled to safety.
The heroes who never came back and the others afflicted since.
Let’s remember today.
Your Rundown for Wednesday, Sept. 11, 2019:
Inflation’s Not A Four-Letter Word
Taking a glance at Trump’s Twitter feed this morning, we read the following:
Zero to less-than-zero interest rates? Refinancing the national debt?
In another tweet, Trump continues to jaw at “boneheads” at the Fed, calling for “No inflation!”
What’s happening here?
Let’s entertain these ideas:
- Zero to negative interest rates would cheapen debt costs but make the U.S. an unappealing place for investors to park capital. Not to mention strangling your cash savings…
- Refinancing U.S. debt is not as simple as, say, refinancing a mortgage. It would probably require the Treasury Department to 50 to 100-year U.S. Treasuries with less than 1% yields. In theory — since it’s never been done — it would be good for the U.S. to save on interest; ultimately, bad for the economy.
- “No inflation!”… sounds great: The price of goods and services stays the same while paychecks grow? Inflation, however, is not necessarily a four-letter word; in moderation, it’s necessary. The Fed believes the sweet spot’s at 2% to keep the U.S. economy out of recession. In short, low inflation is better for the economy than the opposite — deflation. (Can you say the Great Depression?)
Last word: A few weeks ago, we made an audacious claim; we said instead of the Fed cutting rates, why not raise them?
For one reason. In the event of an economic downturn, the Fed would still have a weapon left to combat recession.
Market Rundown for Wed. September 11, 2019
S&P 500 futures are up 3.5 to 2,982.
Oil up 29 cents to $57.69 for a barrel of West Texas crude.
Gold’s lost $1.60 per ounce to $1,497.60.
Bitcoin is down $36.75 to $10,073.98.
Have a great day; we’ll talk tomorrow.
For the Rundown,