Episode 53: The Fed enters rate cutting cycle

Jul 16, 2019 | Podcast Episodes

The US Economy, the biggest engine of growth over the past 12 years, has entered into a rate cutting cycle for the first time since the global financial crisis. While the US economy is still growing, the Fed sees a need for a buffer in the short term to look after cross-currents caused by Trump’s trade battles with China, and the trade slowdown coming off the back of it. 

These rate cuts appear to be what Donald Trump has hoped for because it allows more ability to put more pressure on China. Since the trade war has started China has actively pursued a policy of depreciating the renminbi (or yuan) to offset some of the tariffs the US has set on Chinese goods. However, with the US implementing interest rate cuts, the pressure on the US dollar is decreasing, which offsets the cuts China has engaged in. 

In some ways, the interest rate cuts play nicely into Trump’s trade dispute plans and provides more ammunition to continue the fight. Listen in now for more of our discussion on this topic.

This Week’s Investor Exchange Round Table Covered:

  • Brett shares a report stating the percentage of Australian homes that sold at a loss in the March quarter is the highest in 6 years. That doesn’t necessarily mean the market is bad, it is more likely these people bought and sold at a time that wasn’t conducive to making money. Listen in for more on the statistics on the overall Australian property market. (16:24)
  • Louis discusses the amortisation schedule and investment asset position, and why it is better to put more into your investments than towards your home loan. By putting more into your investment asset position each year, it increases at an accelerating rate. Listen in for how to use your amortisation schedule and investment asset position to accumulate wealth for retirement. (29:38)

You Cannot Be Serious:

A criminal on the run in Missouri gave himself away to the police by releasing a loud fart!

Adidas released a congratulatory email to runners at the end of the 2017 Boston Marathon congratulating them on surviving the marathon. Not in the best taste!

A physicist in the UK 3d printed a Lamborghini Aventador with this son! The body looks exactly like Lamborghini but is powered by a 2003 Chevy V8 engine.

Listener Questions:

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The Investor Exchange

The Investor Exchange is weekly podcast where the expert panel share banter, tips and insights on how to grow and manage wealth.

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