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Fed Should Take A Hint From Commodities
If the global economy's holding up -- and I'll readily admit to positing a bit of a straw man there considering most observers see a slowdown -- someone forgot to tell crude. And just commodities more generally.
I don't typically spend a lot of time editorializing around the mercurial behavior of the world's most financialized commodity, but on Tuesday, Brent sank below $70.
That's a meaningful development, particularly to the extent you trouble yourself with the psychology of "round" numbers
Economy is slowing. Fomc’s chance to cut gradually left the building when they passed on the July cut. They would be really smart to cut 50 this go. If it’s overboard, just skip cutting the next meeting. Real rates are too high. Risk management suggests a 50 is correct. My last post on the subject suggested going 3/8 twice. That would work also.