Powell Says September Rate Cuts "On the Table"

ET in here basically praying there isn’t a rate cut before the election lol

 

Could be much needed. I have talked to several people in multiple industries that have said that right around the time Trump was shot at, CrowdStrike hit, and the Olympics started business has been very soft. Restaurant, retail, and leisure travel industries are the people I generally work with along with consumer goods. So recent that its just anecdotal but supported by a few industry data agencies we get that are only as recent as two weeks ago.

 

Not entirely relevant, but the Bank of England cut rates today by 25 bps. First cut since 2020.

 

Predicting=hoping

 

Just means Kamalaflation and Bidenflation are one and the same.

 

Even if the Feds cut 25 bps, nothing will happen in the markets as according to you it's already priced into the market.

The problem with any cut at this point including .25% in September if it were to happen, it is inconsequential:

The last Fed Reserve increase was on July 26, 2023. Since that time numerous cuts have "been on the table." None have materialized. The market DJIA over the last year:

DJIA | Dow Jones Industrial Average Historical Prices - WSJ

July 31, 2023--------35,065.62
October 27, 2023----32,327.20 (the low)
July 31, 2024--------40,842.79

How many rate cuts have been priced into the market since the Feds last rate hike, 4 or 5? None have materialized to date.

So long as unemployment remains in a historical low range, the economy continues to grow, the best in the world according to posters here, and inflation remains above the 2.0% target without guidance to suggest that 2.0% and below is sustainable, there won't be a rate cut in September.

The thing is, even the Federal Reserve doesn't know and can't know without the next 2 1/2 months of data to look at. It matters not what the markets have priced in as the Feds can't help irrational exuberance as it exists in the markets and on this board. Basically, Powell said the Fed is in a good place to go either way or stay the same depending on the data that comes in.

With all due respect to your advanced degrees, you read too much between the lines without listening to Powell's statement.

Over the last year, I have been consistently saying not yet. At least now there is a chance depending on the data. That is where we sit today, one day after the completion of the July 31, 2024 Fed meeting.

 

So you are saying there is a chance… That’s progress from your thinking.

It’s not me saying the market has it priced in. Trader’s literally have future options priced at 100% chance of a rate cut in September. Not 98%, not 99.9%. The market had a 7% chance of rate cuts priced in for this week’s meeting, so you can’t claim rate cuts were priced in previously.

But back to my question, if the market is behaving irrationally (which is a very decent argument at 100%, but not at 98%) how do you capitalize on that?

https://www.wsj.com/livecoverage/fe...et-on-september-rate-cut-EgaafIqm5R7em2GaxsYb

 

I have no idea what you should do, and I wouldn't give you advice.

At my age, older than dirt, my money is liquid, nothing long term. I was happy with I-Bond yields when inflation was higher and now T-Bills in the 5.5% range. Shorter term T-Bills haven't come down but 26 week and 52-week T-Bills along with T-Bonds have come down only slightly. The yield curve remains inverted which doesn't bode well for rate cuts. The US is not going back down to anything approaching zero interest rates. We are close to equilibrium now which I think Powell was alluding to in his statement yesterday.

Moving forward is a conundrum, how to have high GDP which is needed to grow out of our mounting national debt without reigniting inflation. It would help if both parties quit spending like drunken sailors on Saturday night shore leave.

The Federal Reserve is walking a tightrope. Whatever is priced into the market at this time has already been done. You'll have to decide what is best for you based on your age and tolerance for risk.

 

Powell should have cut in July to have any chance at a "soft landing". Day late and dollar short like all us gov. Decent chance we'll be entering a recession this fall. Not good for Harris. Dow sell-off intensifies, drops 500 points on economic worries: Live updates

 

The biggest increase in unemployment claims came from Texas due to a hurricane and is likely temporary.

Michigan is next. I'm not sure what is going on there, maybe the green new scam as it is killing auto jobs.

No recession this fall and no to cutting rates yesterday.

Markets go up and markets go down, even in the same day. Too much irrational exuberance means a correction was due.

 

Yeah, 0.0 chance. Too funny. I don't even see economists talk in absolutes like the post above

Dow futures tumble 400 points as weak jobs report raises recession fears: Live updates

 

It's called RECESSION...

 

Irrational exuberance leads to corrections. You smiles when the Dow goes up and you smiles when the Dow goes down. You shouldn't be in the market without a long-term outlook.

The US may have a soft landing or a recession. It's too early to tell no matter what the squealing pigs are saying.

Stock buyers who think the Dow can only go up beware, there is official volatility in the markets.

 

There will be recession no matter what because of the election. 3 months is a very long time and we all know there will be at least 10 major events before then.

 

I didn’t say 0.0% chance. I said options for treasury futures had it priced in at a 100% certainty and provided a link from the WSJ stating that.

It’s basic math.

 

I didn't quote you.

 

My bad then. Thought you meant my post above the one you quoted because I said 100% and agree there are no guarantees.

Mea culpa.

 

I am beginning to hear noise about a .5 cut. I am skeptical it will happen but it seems more likely than no cut in September.

 

That is what the bond market is betting on this morning… “Interest rate futures went from implying Federal Reserve policymakers would cut their benchmark interest rate by a quarter percentage point when they next meet in September to a half-point cut.”

It will be interesting to watch.

https://www.wsj.com/economy/jobs/jo...8y1oh3gqk3xjmu9&reflink=article_copyURL_share

 

Unemployment is generally a lagging indicator of the economy. With most of the recent economic indicators being positive, the current uptick in unemployment could mean we've stuck the soft landing, and the worst may be over. It could also mean a recession is near. It would be unusual for unemployment to be the leading indicator, but not out of the question.

Either way, today's news means rate cuts in September are even more likely than before. And this won't be the first time the FED has been accused of acting too slowly, and won't be the last. But the FED generally would rather react a little late and play catch-up rather than jump the gun and cause more potential problems. It's their nature.