Cheap money is not a fad, people. So save the economy by borrowing at low-low-low rates and put your cash to work!
Buy a home right now. Or if you own one already, refinance it. And if you have spare cash, buy some stocks. And if there’s a bubble in prices, don’t worry. It’ll get fixed later. Simply put, that’s the new message from the powerful Federal Reserve. The central bank just revised the goals of its monetary policy. The laymen’s translation? If you didn’t think rates were going to be low for a long-time, you were not listening. Cheap money is not a fad, people. Mortgage-rate cuts, for example, gave house hunters 25% more buying power in less than two years. That’s not ending soon. So save the economy by borrowing at low-low-low rates and put your cash to work! Even if you have to pay record high prices for real estate or shares on Wall Street. Now, rock-bottom interest rates seemingly forever may confuse some of you. I have answers to a few questions you might have. Q. Who made the Fed king? A. That “Hamilton” musical? It was THAT guy. You see, the Fed has a tough job as the arbiter of what level of interest rates is the proper lubricant for the economy. It’s a juggle of job creation vs. inflation. That chore is tougher when political division has made meaningful economic management inconsistent at best. So I applaud the Fed for stepping into the leadership vacuum. But this extended “free money” policy makes little sense. Q. What changed? A. The Fed claims it cannot find evidence that the cost of living is getting out of hand, based on its review of inflation rates. The most noteworthy nugget from the research shows that the pre-pandemic hiring spree (remember those “good ol’ days”) didn’t create skyrocketing labor costs.
