Keep Calm and Don’t Think About the Fed
Alex Moschina|September 14, 2024
It won’t get as much press as last week’s debate between Harris and Trump, but for those of us in the financial world, the big day is almost here…
We’re just four days out from the Fed’s long-anticipated announcement that it is cutting rates for the first time since 2020.
As we wrote on Wednesday, the (likely) 25 basis point cut isn’t as high as the markets were hoping for… but it’s still welcome news after more than a year of rates hovering between 5.25% and 5.5%.
Investors want the businesses they invest in to have access to cheap capital. The good news is that Wednesday’s Fed announcement should get us one step closer to that reality.
Of course, underneath it all is the concern that the impending cut is coming too late. Shah said as much to Stuart Varney this week on Fox Business.
When asked why markets had a muted reaction to cooling inflation numbers – and the prospect of a 25 basis point cut rather than a 50 basis point cut – Shah explained…
The market wants to see a deeper cut to stave off any kind of potential recession – whether it’s a soft landing or hard landing, whatever it might be. Markets really want to see a big cut from the Fed… They were slow to catch on to the fact that inflation was, perhaps, more than transient. And they seem to be slow to cut rates where we might be able to stave off any kind of slowing down of the economy. And I think markets are worried about that.
We won’t have to wait long to see how it all plays out.
In the meantime, enjoy your weekend… and try not to think too much about the Fed.
If you’re like most folks, that shouldn’t be a tall order.
Alex Moschina
Alex Moschina is the associate publisher of Manward Press. A gifted writer, editor and financial researcher, Alex’s career in publishing began more than a decade ago when he worked at one of the world’s leading providers of academic research and reference materials. Alex first cut his teeth in the realm of investing when he joined the team at White Cap Research in 2010. There he was charged with covering emerging market trends and investment opportunities. A stint as senior managing editor and editorial director at the prestigious Oxford Club followed. A frequent speaker at conferences and events, Alex has led educational workshops across the U.S. and Canada.
