‘We Are Too High’: Jim Bullard Says It’s Time To ‘Feel The Market’ With Bigly Rate Cut

‘We Are Too High’: Jim Bullard Says It’s Time To ‘Feel The Market’ With Bigly Rate Cut

The hawks were out ahead of Jerome Powell's August 23 Jackson Hole speech (which, despite the furious response from Donald Trump, was actually somewhat dovish) and the reluctance from Esther George and Eric Rosengren to repent and countenance market expectations for easing put some folks on edge. The market will hear from a bevy of Fed officials this week, including Powell, ahead of the quiet period before the September FOMC. On Tuesday afternoon, following a rough day on Wall Street that saw s
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3 thoughts on “‘We Are Too High’: Jim Bullard Says It’s Time To ‘Feel The Market’ With Bigly Rate Cut

  1. The Fed has to ponder how lower rates will screw up the economy. A lot of people are suggesting that a recession isn’t even in the cards just yet, but if the Fed starts a panic cycle and ends up deeper in the trump maelstrom then lower rates begin to take a whole new dangerous dynamic.

    Ponder ==> “We question banks’ willingness to continue to lend at relatively thin (and declining) spreads to offset net interest margin pressure, where questions around credit metrics remain front and center,” the Raymond James analysts wrote in a report.

    Dick Bove, a five-decade bank analyst at the brokerage firm Odeon Capital, said many loans made years ago now might be worth selling — since low interest rates have made investors hungry for high-yielding assets.

    And if banks choke off credit, businesses would probably find it harder to finance new investments in factories, equipment and technology, and households to justify home or auto purchases.

    “A significant recession could develop if banks decide to sell the loans they own rather than make new ones,” Bove wrote this week in an op-ed article on CNBC.com. “At present, the pressure to take this path is rising.”

    https://www.thestreet.com/markets/trump-economy-faces-new-headwind-as-interest-rate-15073316

    1. Hip urban lofts & apartments are going to require your first born, life savings & an indentured servitude contract by the time the fed gets around to the asset inflation problem

      1. The lethal thing outside the USA is the over amped dollar. That, along with the issue of an unknown lag in the effects of global supply chain disruption is an enormous risk. It appears the trade shock hasn’t really shown up yet.

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