Federal Reserve Today: Cuts still coming

Chances are it will keep pushing the market.
Inflation has still been sticky a the employment market is still strong.
It will be interesting to see when they cut as the numbers they say they are watching aren’t really where they hoped when they went neutral and started talking about “normalizing” rates.

3 cuts would usually mean June Sept Dec, seems a bit aggressive based on their recent history.

 

May July December. They won’t do September..

 

I’ll be shocked if they cut in May, that’s only 2 months away and the data has been pretty slow to move as of late in a rate cutting direction.

 

I almost bought some spx calls today. But with news coming they were way too pricy from volatility to play the game. Wish I had. That said it was a good day for my CCL calls.

 

Rates seem fine where they are for now. This gives the fed some ammo if they have to actually address a downturn/recession. Very close to their 50 year avg.

 

Economic good news shouldn't be political. It should be good news for everyone.

 

The market liked the news. It’s up.

Our economy is still adjusting from the effects of covid. I like where it’s going except for a few items that seem still a little too high in price.

It’s better than I thought it would be a year ago.

 

Fed should’ve slowly raised rates back in the 20-teens after we got out of the Great Recession. We’ve had abnormally low interest rates dating back to 2001.

 

raise the rates and the interest costs to the munis and to the fed becomes too much. they (gubmnt) were keeping rates low so they can borrow cheaply and continue to live beyond their means.

 

Actually, very bad news for Biden if they don't cut this summer and not great he didn't get a March cut. Fed is waiting too late to react again. Like they do 100% of the time. Waited way too late to raise and will wait too late to cut. Although hard to blame them here as they can't get it wrong, old data is their undoing. There will be no robust economy talk this fall.

Owner of Circle K stores reports steep profit drop, blames ‘headwinds, especially in US’ (msn.com)

 

They also spent a ton on acquiring new stores. That kind of capital outlay will take a chunk out of current profits.

 

Sales per store was down significantly. 7-11 down worse. These are everyday joes who are buying less energy drinks, candy bars, and smokes.

i'm certainly not saying the sky is falling. But these are the kind of stats/signs the Fed reads and reacts to six months later.

Anecdotally, I know a lot of commercial developments that have been tabled/shelved in the last six months. It's already starting to trickle down to the workforce.

 

Where?

 

Florida panhandle.

But when rates go from 4.25 to 8.25 during design process, underwriting becomes a lot harder. I'm sure it's common everywhere.

 

Housing, food, energy just keep going up. Not sure how to slow it down other than demand reduction and I don’t see that happening for any of those core costs. Three this year would surprise me.

 

Not to mention construction costs go up 45 - 60%. I see it, market is still there in SW Fl as the people just keep coming.

 

Might be a stupid question but these rate cuts into the 4's will only be for 10 year fixed? So potentially 6% on 30 years?

 

3 rate cuts will probably get the 30 year mortgage to 6%. And probably a 100 basis points in 2025.

If we end up with mortgages in the mid fours to 5’s that a good place. We had free money for far too long. Capital will be directed to better investments and we managed just fine in the late 90’s and early 2000’s at that level.