Alabama's Morning News with JT
Jay Ratliff knows about rate cuts
An official message from Medicare. A new law is helping me save more money on prescription drug costs. Maybe you can save too. With Medicare's Extra Help Program, my premium is zero and my out-of-pocket costs are low. Who should apply? Single people making less than $23,000 a year or married couples who make less than $31,000 a year. Even if you don't think you qualify, it pays to find out. Go to ssa.gov/extrahelp. Paid for by the U.S. Department of Health and Human Services. We are joined as we are every Wednesday morning by Jay Ratliff and Jay, welcome to the show. Very pleasant. Good morning. Absolutely. So it looks like there's some signs. There might be some slowing of the economy. And so we might be able to have some rate cuts possibly maybe. Maybe so. In fact, that's obviously the hope and we came into 2024. In fact, it was before it was like November, December last year. We had all of these pundits that were out there screaming that, you know, if you're worried about these rising interest rates, don't worry, 2024 is going to be the year where we're going to see six, maybe eight massive rate cuts. We'll be back to 3 percent. No time at all. Just wait and see. Well, obviously this year, that's not been the case because we've not seen at least one interest rate cut the entire year. And each time that we reach a point where we have inflationary data that goes up, you hear the groan, it starts to go down, there's a collective cheer. John, right now, there are certain things including some reports we received last week that indicate that inflation is slowing and there's things that are pointing towards a possible trend that could allow the Fed to say, you know what, we're to point now where we can look at maybe lowering interest rates. So there's about an 80 percent chance in September that's going to happen. The problem is if we get data from here till then that indicates the contrary, the Fed's going to back off. And right now there are people so excited, they're saying, we're going to see now three interest rate cuts this year. It's like they're trying to pressure the Fed into doing something, but you know what's going to be fun to watch. And of course, if the Fed, I was going to say, and of course, the Fed doesn't take well to pressure, they do their own thing. They don't care. And that's why if they lower interest rates in September, it's going to be, you're doing that for Joe Biden. You're trying to help the President. I mean, Jerome Powell is one of my favorite Fed Chairman because he's always as transparent as he can be. He lets people know what he's thinking. And when they came into this year, the Fed hoped they could see as many as three interest rate cuts. Now, that's from the guy that's in the captain's chair that's steering the ship. So when you had all these other people screaming that we're going to have 6, 7, 8, I'm thinking, what are you smoking? I mean, it doesn't match with what the people in charge are saying. And right now, that's what we're at. So, Fed Chairman Powell, yesterday and today, there's going to be some, I think it's part of his two-day appearance in D.C., and afterwards, he's going to make some announcements, answer some questions perhaps, and we'll see what his thought is on the economy, the state of it, as well as the jobs sector and inflation, and see if he's going to give any other indication that perhaps we could be closer to that. If we get one this year, I'll be happy. If we get two interest rate cuts, I'll be happy, but keep this in mind. You've got to things turn in an opposite direction, and we start seeing these things rise faster than expected. The Fed could pull out an interest rate hike this year if need be. So they're going to do whatever they need to stay ahead of inflation, because they know if you get behind it, there's no catching up. And Jay, I understand the word recession has once again reared its ugly head. How is that going to play into all this? Well, you know, we came into the year saying, "Okay, recession is something we're really going to be looking at here," and what's taking place is that when things start to get better, that word disappeared. You couldn't find it in a Google search in any article anywhere, but when we started to seeing things slow down and say, "Well, wait a minute, things are slowing down, not only here in the United States, but around the world." Maybe there were session concerns maybe coming back, and don't believe that the Fed is not clearly aware of that as well. So there are so many moving pieces here that makes it very, very challenging for the Fed and all the people connected to try to determine what's going to be the best course of action. What we do know is so far the things that they have done seem to have worked. And if that continues to be the case, they're going to do what's in the best interest. They don't care who's screaming, who's saying what, who's accusing them of doing too much or too little, they're going to do what they have. They have their predetermined plan of attack. They're going to follow that game plan to the end, and they're going to be consistent in their approach. And when they do start cutting interest rates, it's going to be slow, it's going to be gradual, it's going to be over an extended period of time. So if you see headlines about, you know, we're going to be at 3% interest rates in four, five, six months, I mean, Fortune came out with an article this week saying, "Well, we're out now separate eight interest rate cuts between now and July of next year." And I'm thinking, "Okay, you're dumb enough to make those predictions at the beginning of the year, and you're wrong, and now we're back to making them again." You simply can't suggest that because too many people are buying homes they can't afford hoping interest rates will drop, and they can refinance, and that's a dangerous way to go. For more information, visit our website, www.ssa.gov/extrahelp, or visit our website at www.ssa.gov/extrahelp. For more information, visit our website at www.ssa.gov/extrahelp, or visit our website