The US dollar came to rule the world in the wake of two world wars. But back then, the dollar's hegemony was based on a solid foundation of savings and capital accumulation. But today, the dollar's growth is based on huge piles of debt.
With its latest rate cut, the Fed is either caving to pressure from the Trump administration, or the Fed is admitting the economy is weaker than stated. Or the Fed simply doesn't know what's going on.
With the economy growing at 2.1%, unemployment at 3.6%, creating 170,000 jobs per month, and estimated underlying core inflation of 2%, no objective data justifies cutting rates that are already artificially low.
Donald Trump thinks the Fed raised rates "too fast." In truth, rates have been at remarkably low rates for the past decade. And how would Trump know how fast is "too fast" anyway?
The fact that the most conservative investors are being forced to purchase bonds of nearly bankrupt companies for virtually no yield is not a success of monetary policy nor a tool for growth.
The fact that politicians, central bankers, and “too big to fail” bankers all oppose a gold standard is a tacit admission that hard money would serve as an effective constraint on their activities.
