What Happened to the Data-Dependent Fed?

The Fed will cut tomorrow and likely it will not be enough to satisfy Trump or those looking for shock-and-awe.

Somehow the Fed went from auto-pilot hikes and balanced sheet reduction, to wait-and-see, then to numerous Fed governors discussing the need not for one cut but more.

Just Do It

Former Fed chairs are also in on the "Just Do It" mantra.

Janet Yellen

Former Fed Chair Janet Yellen chimed in.

Greenspan Wants Insurance

Data Dependent?

What the hell happened?

The only data that supports a rate cut is the yield curve itself.

Insurance?

The notion that a rate cut offers insurance against anything is total silliness.

The bubbles have been blown. One cannot insure against what has already happened.

Nor will an extra 25 basis points stop a recession. It's already baked in the cake.

Mike "Mish" Shedlock

Comments (26)
No. 1-18
Tony Bennett
Tony Bennett

"The Fed will cut tomorrow and likely it will not be enough to satisfy Trump or those looking for shock-and-awe."

...

My only quibble (agree with rest of post) - I think DJT "wins" even with a 25bps cut. Every tweet/comment DJT makes concerns staking out the high ground.

He is privvy to non public data and likely guesses things fall apart at some point (before election). A FR not doing his bidding will make it his scapegoat when the INEVITABLE occurs.

...

Let me add my voice to those who find this comment system - pathetic

Carlos_
Carlos_

"The notion that a rate cut offers insurance against anything is total silliness"

That depends on your perspective... For the Fed that may be enough to deter Trump from firing them intermediately or force their resignation. So yes it is employment insurance..

FromBrussels
FromBrussels

The race to the bottom this is.... Good luck everyone, try to make a buck or two while getting sucked into the irreversible downward spiral...

Jojo
Jojo

Bad news for savers who were hoping that interest rates were finally on course to getting back to normal.

thimk
thimk

@Jojo you got that right ! A thumps down for Orange mans efforts to suppress interest rates prior to election to the chagrin of us savers.