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Everything The Fed Should Consider For The September FOMC Meeting
On Wednesday, the Fed will answer your questions about life, the universe and everything. Or at least about the size of the cycle's first rate cut and the Committee's outlook for policy now that inflation's back on the right path and the US labor market's evidencing the kind of deceleration Jerome Powell pledged last month to forestall.
As of this writing, the 25 versus 50 debate's still live. The size of this week's cut remains a coin toss. My guess is the Fed will send out more smoke signals
I like your plan (hopefully the Powell Team is reading your articles). 50 now 25 later this year (i.e. Nov) and the door is always open to re-evaluate the situation and do whatever is needed in Dec (but don’t explicitly tell the market that until the time comes)
If 25-50 is the range, per the information in the first paragraph, the answer is exactly 42 (Powell should know that if he is a reader).
Ok. You convinced me. 50 over 25. I will email the Fed. 🙂
So you’re saying the Fed will cut rattes by 42bps?
Makes perfect sense to me. I hope Powell remembers to apologize for all the inconvenience.
Democrats aren’t helping by calling for a 75BPs cut.
https://www.bloomberg.com/news/articles/2024-09-16/democratic-senators-call-on-fed-to-cut-rates-by-75-basis-points
Its truly amazing how the entire fate of the world seems to rest on whether we do 25BPS or 50BPS this week.
Exactly nobody on the Committee is going to care that Elizabeth Warren wants 75, which is to say no she’s not helping by politicizing it and giving Trump a reason to complain, but also no that isn’t going to stop them from going with 50 if that’s what they want to do.
Note Bill Dudley saying he “expects” 50 today: https://www.bloomberg.com/opinion/articles/2024-09-16/the-fed-should-cut-50-basis-points-now-and-i-think-it-will
That’s Timiraos tipping 50 (sort of), Colby Smith tipping 50 (sort of), Greg Ip demanding it (basically) and Dudley “expecting” it (explicitly).
Fading that is, in my opinion, a fool’s errand. FWIW I already cashed out my 50 bets. I was up enough (triple and then some). Now I’m betting on no change in November. Not investment advice (obviously).