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Tag Archives: rate cut

FOMC: Trust Us, Funding Pressures Don’t Really Matter

Before the repo rumble this week, Federal Reserve Chairman Jay Powell wanted to coast into a second rate cut on the comforting breeze of his insurance rhetoric. No longer one and done, that’s done, a second straight cut would be more consistent with a more forceful yet unnecessary policy response. Again, his publicly stated view is that the US needs rate cuts even though it doesn’t need them. Losing control of fed funds simply wasn’t in the plan. It’s hard to argue there’s no need for...

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Just Who Was The Intended Audience For The Rate Cut?

Federal Reserve policymakers appear to have grown more confident in their more optimistic assessment of the domestic situation. Since cutting the benchmark federal funds range by 25 bps on July 31, in speeches and in other ways Chairman Jay Powell and his group have taken on a more “hawkish” tilt. This isn’t all the way back to last year’s rate hikes, still a pronounced difference from a few months ago. The common forecast relies entirely on the subjective interpretation of the labor market....

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US Industrial Downturn: What If Oil and Inventory Join It?

Revised estimates from the Federal Reserve are beginning to suggest another area for concern in the US economy. There hadn’t really been all that much supply side capex activity taking place to begin with. Despite the idea of an economic boom in 2017, businesses across the whole economy just hadn’t been building like there was one nor in anticipation of one. The only place where there was a truly robust trend was the oil patch. Since the last crash a few years ago, Euro$ #3, the oil sector...

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There’s Dollar In The Rate Cut, But Not Nearly Enough Dollar

The insurance rate cut has been issued. Telling the assembled members of the press this is nothing more than a “mid-cycle adjustment”, Chairman Powell was cautious not to betray too much concern. The first rule of central banking is not to make anything worse. Subprime must always be contained. Yet, he has the unenviable task of explaining what is a complete (and for many an unnecessary) 180-degree turnaround. Mere months ago, inflation and acceleration, an economy risking becoming too good....

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31/7/19: Fed rate cut won’t move the needle on ‘Losing Globally’ Trade Wars impacts

Dear investors, welcome to the Trump Trade Wars, where 'winning bigly' is really about 'losing globally': As the chart above, via FactSet, indicates, companies in the S&P500 with global trading exposures are carrying the hefty cost of the Trump wars. In 2Q 2019, expected earnings for those S&P500 firms with more than 50% revenues exposure to global (ex-US markets) are expected to fall a massive 13.6 percent. Revenue declines for these companies are forecast at 2.4%.This is hardly...

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