This is a big mistake. There is nothing the Fed can do revive the economy from the Corona virus, because this is not a demand problem, it is a supply problem. The economy WILL slow down because the major parts of the economic chain have been considerably affected by this virus. You cannot use more money when there is less to buy and sell. This will happen simply because whatever solution to the virus disruption will take time to be implemented.
I am always surprised when software engineers have such strong opinions on monetary policy. Black and white statements like "There is nothing the Fed can do revive the economy from the Corona virus" aren't the best for macroeconomics discussions that rely on imperfect information and multiple related variables. Your wording makes it sound like you know more about macro than the best minds in monetary policy.
What does anyone expect a Fed interest rate cut to do to spur people to go back to business as usual? The city of Austin is about to cancel SXSW. Do people think they might change their mind now that the Fed has cut borrowing rates?
No. People are reacting to this virus by actively choosing to avoid conferences, travel, restaurants, movies, shops, and sporting events. They aren’t doing it because they’ve run out of money or are trying to save. They’re doing it because they don’t want to get sick. The Fed can’t will people back out into normal life by cutting interest rates.
And that’s why the market is basically flat today after this announcement. The market has nearly universally reacted to this rate cut with ambivalence.
It's more than Software Engineers that perform armchair economic analysis. I wouldn't single them out. Anybody who's well-to-do and participates in markets has a direct interest in paying attention to the Fed and markets. Anybody in top 10% likely has good reason to pay attention.
I hate to say it, but I believe your confidence is severely misplaced. The indoctrinated airheads running the Fed are hardly the "best minds in monetary policy." This is the same central bank that stuck its head in the sand despite clear warnings approaching the 2008 financial crisis, then proceeded to overreact to appear as if they were doing something(1).
When is the last time the Fed's spastic behavior had a sure and long-term positive impact on the economy from the average person's perspective? I specify this perspective because the macro measures used by central banks are not always accurate indicators of the general welfare. Central banks are good for primarily one purpose, and that is ensuring the economic dominance of the groups controlling them. This has been their purpose throughout history(2), and I don't see that changing now. This most recent move is at best a platitude.
All that said, I agree with your sentiment that blanket statements, especially in the highly dynamic field of economics, tend not to be accurate or helpful.
(1) Danielle DiMartino Booth, Fed Up
(2) Look into the history of the Banque Royale of France 1716-1720 and the history of the Bank of England up into the 18th century. The long and short of it is these banks were used as mechanisms by the elite to retain control over currency systems which would otherwise have given too much power to the public for their liking.
Software engineers are uniquely qualified to analyze supply chains and supply chain problems. In this case, technical analysis looks a whole lot different than the chicken bone divination stuff you see with thinkorswim or other trading platforms...
Software engineers are uniquely qualified to analyze supply chains and supply chain problems.
You’re going to have to qualify that. I’ve been doing this shit for thirty years, including writing logistics and other supply chain software. Do not prioritize my opinion just because I write software; prioritize the opinions of, oh I don’t know, maybe COOs? The buyer for electronic parts at my employer? Anyone, anyone but software engineers so arrogant that they think they have an opinion worthy of listening simply because... hell, I can’t even guess why a software engineer would think that.
Agreed. The worst thing about software engineers is how smug and arrogant we can be. I think it's just an astounding ignorance of other fields and how they're no less complicated or filled with smart people than ours is.
> Software engineers are uniquely qualified to analyze supply chains and supply chain problems.
Care to substantiate it? Why? At the very least businesspeople should be more qualified because that's what they deal with? Just because software engineers have to think for a living and do some math sometimes doesn't mean they are experts in every field where that is used...
