Why the Fed won’t hop on the rate-cutting bandwagon just yet
Make Me Smart
Marketplace
4.6 • 5.5K Ratings
🗓️ 6 June 2024
⏱️ 12 minutes
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Summary
The European Central Bank is joining Canada in cutting interest rates after months and months of holding them steady. But the U.S. Federal Reserve isn’t likely to follow suit, at least not yet. We’ll explain why. Then, we’ll dig deeper into the political and financial motivations for New York Gov. Kathy Hochul’s abrupt decision to block congestion pricing in New York City. Plus, what antitrust investigations into Nvidia, Microsoft and OpenAI could mean for AI mania.
Here’s everything we talked about today:
- “European Central Bank Cuts Interest Rates for the First Time Since 2019” from The New York Times
- “ECB: Interest rates are coming down in Europe. The Fed won’t follow yet” from CNN
- “Canada becomes first G7 nation to cut interest rates” from Reuters
- “Advocates for congestion pricing want Governor Hochul to think about long-term benefits” from ABC7 New York
- “Big Auto And The Death Of Traffic Congestion Reform” from The Lever
- “Banerji: Seeing a true mania in Nvidia and meme stock trading” from CNBC
- “Angel Reese: People watch WNBA for me too, not just one person!” from ESPN
- “The ugly discourse surrounding Caitlin Clark” from The Washington Post
Join us tomorrow for Economics on Tap! The YouTube livestream starts at 3:30 p.m. Pacific time, 6:30 p.m. Eastern. We’ll have news, drinks, and play a round of Half Full/Half Empty!
Transcript
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| 0:00.0 | Nope, let's do it. Sorry I was stretching late to reach the volume knob. |
| 0:08.0 | Hey everybody I'm Connor Brisdall. Welcome back to Make Me Smart, where we |
| 0:11.8 | make today makes sense. |
| 0:14.0 | And I'm Kimberly Adams. Thanks everybody for joining us on this Thursday, June the 6th. |
| 0:19.0 | Big stories of the week is what we do on Thursday Smario Clips lined up. |
| 0:23.2 | The first one comes to us from the head of the European Central Bank, Christine Lagarde, here you go. |
| 0:27.5 | The governing council today decided to lower the three key ECB interest rates by 25 basis points. |
| 0:35.0 | Based on our updated assessment of the inflation outlook, |
| 0:40.0 | the dynamics of underlying inflation, and the strength of monetary policy transmission, |
| 0:46.0 | it is now appropriate to moderate the degree of monetary policy restriction |
| 0:52.0 | after nine months of holding rates steady. |
| 0:55.0 | Madame Lagarde, is that you, Kimberly or am I doing this one? |
| 0:59.0 | No, you know monetary policy, that's all you. |
| 1:02.0 | So Christine Lagarde there, the former head of the |
| 1:06.3 | International Monetary Fund, now the head also French finance minister at one point |
| 1:10.0 | years ago. Now head of the European Central Bank they are cutting interest rates. They have |
| 1:14.3 | beaten the Fed to it because the situation over there is just a little bit different. The first |
| 1:20.4 | rate cut from the ECB in five years almost and it's been steady as you heard |
| 1:24.7 | missile guard say for nine months. The interesting part is that in almost this many |
| 1:31.2 | words she said look this is a one-off. We're not talking about |
| 1:35.5 | Anything else we're just doing this I should point out here the Canada yesterday cut its key interest rate too |
| 1:41.6 | Fed meets on the 10th, 11th and 12th, |
... |
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