In so many ways, the upcoming turn/pivot around the first few days of August will seem swift but the unfolding of the action will happen all the way till October. How things unfold will depend in a BIG way on 1) US Federal Reserve Bank and 2) US/China Trade Sentiment.
Last Thursday, as we're all aware by now, New York Fed President John Williams inadvertently spilled the 50 bps rate cut beans. So why did his office in New York in a matter of hours walk back his testimony on acting swift and getting ahead of this global recession thing? They walked it back because Mr. Williams mistakenly set the bar too high.
See, even if the July meeting is only a 25 bps cut the FED Chair spokesperson and the subsequent DOT PLOT will point to a likelihood of another cut, if not in July at 50bps, then probably September if things are looking to be in worse shape, globally. Wait and see for the other 25 bps.
The old carrot and stick trick. Its how you squeeze blood from a turnip and buy a few more months on the upside till October anyway.
Happy Trapping!
Last Thursday, as we're all aware by now, New York Fed President John Williams inadvertently spilled the 50 bps rate cut beans. So why did his office in New York in a matter of hours walk back his testimony on acting swift and getting ahead of this global recession thing? They walked it back because Mr. Williams mistakenly set the bar too high.
See, even if the July meeting is only a 25 bps cut the FED Chair spokesperson and the subsequent DOT PLOT will point to a likelihood of another cut, if not in July at 50bps, then probably September if things are looking to be in worse shape, globally. Wait and see for the other 25 bps.
The old carrot and stick trick. Its how you squeeze blood from a turnip and buy a few more months on the upside till October anyway.
Happy Trapping!