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Rate Cut Mania Leaves Central Banks Struggling To ‘Out-Dove’ Market Demands
Jerome Powell isn't the only central banker who's under pressure to "out-dove" a "doved-up" market.
On Tuesday, data for May showed euro-area inflation fell more than anticipated, with headline printing just 1.2% in the flash read, while core fell to 0.8%. Both numbers represent a marked deceleration from April, and while that was expected, both prints missed estimates (consensus was 1.3% on headline, and 0.9% on core).
Again, nobody really "trusted" (if that's the right word) the April numb
The takeaway from all I read this AM is that everyone is calling for a correction which short term is likely virtually over…. Reason being that this process includes the fact that the shelf for Bullish Events is being , as fast as the CB’s and ,Media and the rest of the Political Elves out there can work to be restocked… Would make Walmart proud on that score…
Slightly longer down the road , after this retread news is consumed we are stuck with the same problem that now exists plus I really see Deflationary hints out there…All of this , from a timing point of view depends on just how gullible we as the consumer of all this charade really are… I suspect Druckenmiller has all this factored in correctly…..
Rate cuts are not going to bail out the market for risk assets for too long. I would compare Powell and the Fed to Wiley Coyote, who is looking up just before the anvil hits him at the bottom of the canyon. In this case Roadrunner – it is the economy stupid. All the nonsense going on kills confidence.
What kills confidence is there never was a recovery….just a lot of rhetoric assuming there would be one if it was repeated often enough..