Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
From JPMorgan. In its history the Fed has cut rates 16 times with the S@P within 1% of an all time high. ( as is the case now) The market was never lower 12 months out with an average gain of nearly 15%.
Ah, the long-awaited and expected .25 rate cut. The CD ladderers jeer while the HELOC and ARM holders cheer. Seems like the Fed values job numbers over inflation numbers...or maybe the Fed is going to tolerate 3% inflation from now on. I predict it will...my personal inflation numbers (including grocery costs, insurance costs, HOA fees, gas, energy, etc) are a bit more this year...
I assume the various markets priced in this scenario already and quarterly profit-taking shall commence.
Post FOMC Presser Notes Rates: Fed fund rate cut to 4.00-4.25%, bank reserves rate at 4.15% (generous), discount rate at 4.25%. Treasury QT continued -$5 billion/mo, MBS QT at -$35 billion/mo.
Economy is growing moderately. Corporate capex are up. Consumer spending has slowed. Housing is rate sensitive & remains weak, but mortgage rates are trending lower. There is also a national housing shortage. Consumer FICO scores are down & delinquencies are rising.
Tariff effects are beginning to show in goods inflation. Tariff effect may be one-time increase in prices (note that inflation is rate of change in prices, so that may have one-time spike too). MORE https://ybbpersonalfinance.proboards.com/post/2211/thread
Declines both in the number of people looking for jobs and those gaining employment have captured the Federal Reserve's attention. Promoting maximum employment has now taken precedence over maintaining stable prices within the Fed's dual mandate. Eleven of twelve FOMC meeting voters backed a quarter-point cut today. Stephen Miran was the lone dissenter. The Federal Reserve's Summary of Economic Projections (SEP) indicate that seven of nineteen meeting participants expect no further rate cuts this year while two participants expect only one cut.
Comments
In addition to this -25 bps cut, supposedly the Fed signaled 2 additional rate cuts before the year is out.
I assume the various markets priced in this scenario already and quarterly profit-taking shall commence.
Rates: Fed fund rate cut to 4.00-4.25%, bank reserves rate at 4.15% (generous), discount rate at 4.25%. Treasury QT continued -$5 billion/mo, MBS QT at -$35 billion/mo.
Economy is growing moderately. Corporate capex are up. Consumer spending has slowed. Housing is rate sensitive & remains weak, but mortgage rates are trending lower. There is also a national housing shortage. Consumer FICO scores are down & delinquencies are rising.
Tariff effects are beginning to show in goods inflation. Tariff effect may be one-time increase in prices (note that inflation is rate of change in prices, so that may have one-time spike too). MORE
https://ybbpersonalfinance.proboards.com/post/2211/thread
have captured the Federal Reserve's attention. Promoting maximum employment has
now taken precedence over maintaining stable prices within the Fed's dual mandate.
Eleven of twelve FOMC meeting voters backed a quarter-point cut today.
Stephen Miran was the lone dissenter.
The Federal Reserve's Summary of Economic Projections (SEP) indicate that seven of nineteen
meeting participants expect no further rate cuts this year while two participants expect only one cut.