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Started By
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The Pending Rate Cuts
Posted on 9/13/24 at 12:00 pm
Posted on 9/13/24 at 12:00 pm
it isn't a secret that Jpow favors rate cuts at the upcoming meeting, but why now?
Is it because inflation hit the Fed's target? (It didn't)
Is it because the unemployment rate breached the upper limit of Powell's expected range? (not the case either)
it's about the bond rates ... specifically the 2-Yr Treasury Yield . Every time the Fed cuts .... it is because the 2Y Treasury rate is indicating conditions are tightening.
Current 2Y Treasury yields are leading the path lower (2YT Yields are down 1.5 points since April) and its really making people nervous ... increased tightening is not good for the global economy.
The slowdown of the global manufacturing economy is beginning to have a negative impact on markets, IMO. And the overall softness of the labor market is noticeably hurting .
What say you?
Is it because inflation hit the Fed's target? (It didn't)
Is it because the unemployment rate breached the upper limit of Powell's expected range? (not the case either)
it's about the bond rates ... specifically the 2-Yr Treasury Yield . Every time the Fed cuts .... it is because the 2Y Treasury rate is indicating conditions are tightening.
Current 2Y Treasury yields are leading the path lower (2YT Yields are down 1.5 points since April) and its really making people nervous ... increased tightening is not good for the global economy.
The slowdown of the global manufacturing economy is beginning to have a negative impact on markets, IMO. And the overall softness of the labor market is noticeably hurting .
What say you?
4
Posted on 9/13/24 at 12:08 pm to cadillacattack
Trying to thread the needle for a soft landing.
Posted on 9/13/24 at 12:15 pm to cadillacattack
I agree, all of it plus our broke arse govt can’t afford to refi at 4%, much less 5.25%.
Why didn’t Janet term us out when rates were near zero during covid?
Why didn’t Janet term us out when rates were near zero during covid?
Posted on 9/13/24 at 12:37 pm to Suntiger
quote:
Trying to thread the needle for a soft landing.
fricking loved and hated that game at the same time
Posted on 9/13/24 at 1:44 pm to cadillacattack
The gov’t is tired of paying such a premium to service the debt. Hence, rate cuts
Posted on 9/13/24 at 2:13 pm to Clint Torres
quote:
The gov’t is tired of paying such a premium to service the debt. Hence, rate cuts
I think we're too far gone for that. We're now in a position where we'll be paying over $1T per year just to service the debt while the government continues to spend like there's no limit. To cut rates enough to bring that back down to the pre-COVID range of $400B-$600B would take rates being lower than we had prior to COVID and lowering rates that much would set inflation on fire.
Conversely, leaving rates where they are or lowering them only slowly means debt servicing costs still continue to increase at a dangerous pace.
So the reality is that we're just picking which poison we want to take: the slow one or the slightly slower one.
Posted on 9/13/24 at 4:27 pm to cadillacattack
It's cut, .25 for now
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