The Duran Podcast - Russia interest rate cut. Fed interest rate cut

Episode Date: September 20, 2025

Russia interest rate cut. Fed interest rate cutThe Duran: Episode 2341

All right, Alexander, let's do an update on the Russian economy. And we have another interest rate cut. And we also have some comments from Nabilina as well. What are your thoughts on the interest rate cuts and on what Nabilina said? Yeah. And by the way, from Putin as well. And I mean, he didn't go into the detail that Nambulina went into. But it's absolutely clear, again, that he is supporting Nabilina.

strongly. There was lots of pressure in Russia for a much bigger interest rate cut than the one that Nebula announced. She cut interest rates by 1%. So they peaked at 21%, they're now down to 17. She cut interest rates by 1% back in the early summer. Then she cut them by 2%. Now she's cut them by further 1%. They've come down by 4%. And she... she... She... was under a lot of pressure from the usual people, the economics ministry, industrial groups, small businesses to cut interest rates further. But as I said many times, we've said many times, the thing about Nebula is that she's extremely careful.

She absolutely does not want to see the economy's starting to surge again in a way that might lead to more overheating and a return to inflation. She's going to cut interest rates, but at her own pace, and there were demands that she cut interest rates by as much as 6% from some people. I never thought that was going to happen. And a few days before she made her announcement, Putin came out and said, look, the central bank understands the situation in the economy, no one better, but it has got the whole situation.

well in hand, it understands well what is going on in the economy, that inflation is indeed coming down, but we can't take risks with inflation, and we're going to leave it to the central bank, and they're going to act prudently and appropriately. And that's what Nebula has done. Now, she's provided some insight into the state of the economy at the moment. She says that current inflation, the underlying rate of inflation, the rate of actual data, price growth has now fallen to 4%, which is basically the central banks target. We have overall for the year up to now 8% inflation, over 8% inflation. But this is historic.

It relates to price increases that took place earlier in the year. but she also says that yes, the economy is slowing, has slowed significantly. Since it's slowed, since it was going blazing, advancing all cylinders next year. So it slowed significantly. But most people, many people still believe the prices are going to rise. the period of August deflation is ending. Prices in Russia, as I've discussed in the past, tend to fall in August because people, the harvest comes in, food prices tend to fall. All of these factors tend to be in play.

Prices in Russia tend to rise towards the end of the year because people start spending for the holidays. New Year holidays, presents, they want to buy cars, they want to do all of these sort of things. So she said, I am going to keep things at a steady rate because I believe that inflation, year in the inflation at the end of the year will be still closer to 6% than 4 and I don't want to compromise my prospects of getting to 4% inflation next year. But overall, the situation in the economy. economy is stable. We have avoided a recession. Credit at the business level is increasing. And the trend for interest rates is downward. We're going to have more interest rate cuts

over the course of this year. But we're going to do it in a steady, careful way, so that when we get to interest rates, which most people think will be around 12% by you. year-end, we will have reached there without a sudden fall, which might then lead people to rush off, get loans, start stocking up on cars and other things in a way that might start pushing prices upwards. Okay, so the Russian economy is not in tatters. It's moving along, even though it's at war. It's not a war economy as the European Union goes on and on about, correct?

Absolutely not. It is that in no sense. In fact, military spending is probably falling, actually, because the big investments in building up factories and all of those kinds of things have already been made. So they don't need to spend as much as they were spending, say, two years ago. So, I mean, it's actually falling. And if you look at the budget deficit, it's now below 2% of GDP and is likely to fall further. So it is not in tatters. It is not in recession.

Inflation, which is the big story that we were getting a few months ago, is declining and declining steadily and actually quite fast. And interest rates are falling as well. Now, of course, what you're going to see, because you will always have to find in the West, some narrative for why things in Russia are bad, because the growth rate is going to be significantly lower this year than it was last year. They're going to fixate on that. They're going to say that, you know, the economy is stagnant or in decline or something like that. But as we've discussed precisely on these programs, the central bank and the government intentionally brought down the rate of growth of the economy because they're probably.

priority was to reduce inflation. And it's what central banks and governments used to do in the West when there was overheating. Periods of overheating used to be followed by cooling. I can remember very well when that was standard economic practice in the United States, in Germany and all of those places. Now, nowadays, we don't want to do that. We don't want to risk recessions or even have brief recessions. We want to keep it. We want to keep it. growth continuously high, and that is why we have so many of the problems that we do. The Russians work in a much more conservative and, dare I say it, conventional way. They run their economy in the way that we used to run our economies, but do so no longer.

Okay. Let's talk briefly about the U.S. economy, pal, and interest rates, and the pressure from Trump. I'm Powell. Yes. This is an interesting issue because inflation has been actually quite sticky in the United States. Price growth is above 2%. I mean, not hugely above. But then bear in mind, some people believe that the official statistics on inflation we're getting from the United States understate the level of problems, the level of the actual, the true level of inflation. But anyway, inflation has been sticky. It is above the target, the 2% target. And the latest

reports about the state of the economy in the United States suggest that it is indeed, slowed and has slowed quite significantly. So it looks like the employment growth that was previously reported probably hasn't happened. Once again we've had you know adjustments to the labor figures and it looks as if a lot of the labor growth really hadn't happened very much. There's some claims that wages are that real wages have been falling again and industrial production in the US has also have been falling. Now, in that kind of situation, it makes complete sense for the president and his administration to want to kickstart the economy by bringing interest rates down. And they have a

further interest in bringing interest rates down, which is that, of course, the US currently is running a significant budget deficit, in a very big budget deficit. So they want to reduce interest payments on that deficit and on the accumulated debt, because doing that will give them more room to maneuver so that they can move forward with their plan to cut taxes to kickstart the economy further. So despite the fact that inflation is quite sticky, the Fed has now cut interest rates by half a percent, and I think they're going to cut interest rates further. And the priority always is growth and we're likely to see growth.

Now, I am currently in the United States. I'm in Chicago at the moment. Obviously, over the course of a very short visit, it's very difficult to get an impression of the overall state of the economy of any country. But I'm going to give my impressions. And of course, maybe I am an atypical part of Chicago. But my overall sense is that the economy in the US is a lot more stable and in much better shape that the economy in Europe is.

Now that is, as I said, probably an uncontroversial statement, but it's certainly the very strong impression that I have come away with. So given that that is so, I think despite slightly stickier inflation, probably the Fed does indeed have room, space to cut interest rates and we are likely to see more growth in the US over the next year. So that is my strong impression. In Europe, by the way, I predict that the course will be exactly in the opposite direction, despite the fact that we have certainly in Britain higher inflation than we do in Europe, than we do in the US, and by the way, in the US, and by the way, Europe. I suspect that in Britain, even though they're trying to cut interest rates at the moment,

they won't be able to sustain it and interest rates will start to push up again later next year. And I'm afraid I think the same thing is going to happen in Europe too, because as governments, the German government and other governments start to borrow to get themselves out of trouble, the French government, the new prime minister there, Monsieur Le Corneux, doesn't seem to be interested in budget cutting. He's got to keep the macro in post as president for the next year. We talked about that. So he's going to be spending more. Friedrich Meltz is spending like there's no tomorrow. I think pressure on interest rates in Europe is going to increase. So we're probably going to start to see interest rates rise in Europe and in Britain. So at just the moment when we're likely to

see higher growth. in Russia, and I expect higher growth in the United States, the people of Britain and the people of Europe, who are already contending with escalating economic problems, are going to be experiencing further economic decline. All right, on that note, we will end this video. The durand.orgals.com. We're on X. We're on telegram.

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