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Fed Lifts Inflation Outlook, Sees Fewer 2025 Cuts
The Fed cut rates by 25bps on Wednesday, as expected, bringing the total amount of easing since September to 100bps.
It'd be an understatement to say not everyone sees a rationale for additional easing (or "removal of restriction," to use the Fed's preferred style). By appearances -- and notwithstanding the "K-shaped" discussion and the attendant debate around the worsening "haves" / "have-nots" divide -- the US economy's doing quite well. And core inflation looks poised to run above the Fed's
The Fed cut 25bps and changed the dot plot down to 2 cuts from 4. The market had this exact scenario priced in but doesn’t seem to like that it happened. hmmm
Yeah, and I mean… in a market like this one — i.e., a perpetually bullish tape — a 2% down day gets magnified by the media and by investors like it’s a 5% down day. “Stocks crash” etc.
A couple of days ago you highlighted how McElligot was pointing at some stepped up buying of call options on volatility. Those wise folks are having a fine day so far.
The Vix “bug” om my screen shows it is up 35% on the day now. That’ll get a little attention, no?
Do I hear 50% ?
Now showing up 74.6%.
That’ll get a little attention, no? Not from popular media but in our little world?
Here: https://heisenbergreport.com/2024/12/18/the-fed-triggers-a-vol-shock/
RE: media magnification, I smirk / eye roll these days when article headlines trumpet “HIGHEST yields since Feb 2022” and “biggest SELLOFF since Jan 2020” and similar sh*t. Begging for clicks with the sensationalism…don’t recall seeing it as much in the past but maybe. :: shrugs::