The Fed, in other words, is not quite ready to start cutting interest rates, but it is getting ready to do so. This is significant even if interest rates do not change. The question, then, is how trade tensions today could result in lower interest rates two and a half years from now. Well, the simple story is the economy has a lot more problems than just President Trump’s Oprah Winfrey approach to tariffs. When the natural rate is this low, interest rates do not have to be that high to hurt the economy.

Source: Washington Post June 20, 2019 15:56 UTC