Powell signaling a rate cut in September

[Mick]

I still keep thinking about Obama’s two terms in which he enjoyed 0.25% Federal interest rates for seven of eight years, then when Trump took over, they continually raised interest rates on him every quarter.

But I’m sure it wasn’t partisan.

Fed Chair Powell opens door to September rate cut in Jackson Hole speech, says economic outlook ‘may warrant’ change in stance

• This topic was modified 7 months, 3 weeks ago by Mick.

[Mick]

Is the Fed too late with its interest rate cuts? On the one hand, it’s never too late. On the other hand, they should have cut rates a long, long time ago, dating back to when Biden’s job numbers cratered. They should have cut rates as soon as inflation started to slow.

Is the Fed too late? Experts question power of rate cuts now

I think we need a full interest rate point cut, 100 basis points…which we’ll never get. We have an outside shot at a 0.50% interest rate cut, with .25% the most likely cut, I’d say 7x more likely than a 0.5% rate cut, so call it: 6% no cut, 80% for a 0.25% cut, 11% for a 0.5% cut and 4% for more than a 0.5% cut.

[Legend]

Too late?  They started cutting a year ago.

what’s that you say?  They stopped cutting when Trump was elected?  Oh.

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Sic transit gloria mundi (so shut up and get back to work)

[Mick]

You’re right. It must really gall Trump that Obama had 0.25% interest rates, literally the lowest they could go, for seven of Obama’s eight years.

I think the cuts should be more significant than 0.25% for this reason alone:

Not only is the economy obviously stalling, but the effects of artificial intelligence have taken hold for the past year or two…and will only accelerate.

‘Market psychology has shifted’: The only question now is how far and how fast the Fed will go

[Author]

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