The Vice President wants lower interest rates. Expressed this desire out loud. To reporters. Less than two weeks before the Fed meets to decide on rates.
Groundbreaking stuff. A politician saying he'd like cheaper money right before the people who control money costs have a scheduled meeting. Would be nice to have some help, he said. Like he's asking a neighbor to jump his car battery instead of commenting on monetary policy that affects 330 million people.
The Federal Open Market Committee meets every six weeks. They have a website. A published calendar. Vance could have checked this before wandering into a microphone. But here we are. The second-highest elected official in the country treating the central bank like a customer service desk he can passive-aggressively nudge in front of cameras.
The Fed has spent three years trying to convince markets it makes decisions independent of political pressure. Built entire press conferences around that one idea. Vance just called their bluff with the economic sophistication of a guy haggling at a yard sale.
Retail traders are now pricing in a 90% chance of a rate cut. Not because of data. Not because of inflation prints or employment figures. Because the Vice President said it would be nice. They're basing their positions on a man who used the phrase "would be nice" in a sentence about federal monetary policy. Might as well trade based on fortune cookies.
The FOMC meets September 17th. They'll cut or they won't. Vance's opinion will matter exactly as much as it did before he opened his mouth. Which is zero. But at least now everyone knows the Vice President thinks the Fed works like a suggestion box at a Wendy's.
Photo by Brett Jordan on Unsplash
Leave a Comment