Fed Rates: Be damned if you do, Be damned if you don’t

[errolanderson]

U.S. Federal Reserve appears forced to cut rates this week. 1/4 to 1/2 percent talked about in the media. Central banks are now caught in-a-corner with failed Keynesian policy. There apparently is dissent within the Fed board of governors. Some do not want a rate cut.

This may simply not end well for markets (IMO). The parachute rip cord has already been pulled and no one has jumped out of the plane yet . . . .

[malleefarmer]

Cuts here hmmm 2 weeks ago maybe 3 really cant go any lower.

australia The Reserve Bank has cut interest rates to an historic low of 1 per cent, as it stares down the twin issues of rising unemployment and a slowing economy. july 1

[errolanderson]

Cuts here hmmm 2 weeks ago maybe 3 really cant go any lower.

australia The Reserve Bank has cut interest rates to an historic low of 1 per cent, as it stares down the twin issues of rising unemployment and a slowing economy. july 1

mallee . . . most global central banks are now cutting accept in the land of 'milk 'n honey' Canada. Bank of Canada sees nothing but economic roses here.

[ajl]

I also expect that the Fed will cut rates tomorrow, the reality is that rates in the US have become market rates now at very low levels. There are no credit worthy investments anywhere in the ROW (rest of world) so money is flowing back to the US as that is the last hope of any sort of return on investment. This rate cut is merely reflective of the fact that demand for US debt is so high, they can't sell enough of it right now, hence the low rates. Under the circumstance a rate cut now does not signal a return to the stimulus policies of a decade ago in the US but merely a reflection of supply and demand for credit.

[errolanderson]

Despite a 1/4% rate cut today, stock markets were hammered into the closing bell. This was likely due to one sentence in the Fed statement:

Chairman Powell stated: "Fed quarter point cut was a mid-cycle adjustment" In other words; it's not a promise of more easing (more cuts).

Translation (IMO) . . . the U.S. stock market and its excessively high corporate valuations must continue to be babysat by the Fed or else. Investors appear expecting a 1/2 % cut today . . . . Expect a potential sharp pickup in the VIX volatility index soon.

[malleefarmer]

heard yestersday some coutries can afford current high priced grain and all other commodities.

the downturn is eesential for well being of many countries blah blah

didnt actually fill my heart with joy.