Does anyone really think the Fed will cut 50 basis points in July?

Discussion in 'Trading' started by noddyboy, Jul 16, 2019.

  1. Market is pricing in 100% chance of a cut. Personally, this is insane.

    upload_2019-7-16_16-43-48.png
     
    #11     Jul 16, 2019
  2. MKTrader

    MKTrader

    Not as insane as rates remaining at zero from 2013-2015.
     
    #12     Jul 16, 2019
  3. MKTrader

    MKTrader

    Markets are already excited. This looks like a "buy the rumor, sell the news" event (at least for a 25 bp cut). I don't think we'll see a crash, but with markets at all-time highs and poor seasonality in August/September, I wouldn't be surprised if there's a moderate correction after the July 31 decision.
     
    #13     Jul 16, 2019
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  4. R1234

    R1234

    I personally think the Fed might cut starting with 25 bps, not because of Trump's pressure but because they are seeing strong signs of an imminent recession commencing in Q1 or Q2 of next year. Just look at important economic indicators such as the Leading Economic Index, Real Retail Sales, Aggregate Hours Worked - the writing is on the wall.
     
    #14     Jul 16, 2019
    MKTrader likes this.
  5. bh_prop

    bh_prop

    Powell was appointed by Trump
     
    #15     Jul 17, 2019
  6. MKTrader

    MKTrader

    I know that. And I also know 2 + 2 =4. Neither change the validity of my statement.
     
    #16     Jul 17, 2019
  7. noddyboy

    noddyboy

    Even Ray Dalio is bearish.
     
    #17     Jul 17, 2019
  8. MKTrader

    MKTrader

    Maybe that's a contrary indicator...he hasn't performed that well recently. And his economic writing, which used to be pretty good, has become more contradictory and rambling IMO.
     
    #18     Jul 17, 2019
  9. Specterx

    Specterx

    In the central banking / academic economist world, the current belief in vogue is that CBs were behind the curve in both 2000 and 2007, and the ECB likewise reacted too slowly to Europe's double-dip in 2011-12.

    Right now, asset prices are holding up but there are clear signs of economic weakness globally, as well as int'l dollar funding stress, plus added risks from the trade war. OTOH inflation is somewhat below the Fed's target (unemployment figures notwithstanding) and there's no clear credit or investment bubble with potential macro significance. Thus, it's really not unreasonable for the Fed to cut a quarter-point to keep markets calm and see if things stabilize.

    Don't see any reason to cut 50bps, but you never know.
     
    #19     Jul 17, 2019
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  10. noddyboy

    noddyboy

    Half-Point Rate Cut Odds Explode to 71%
     
    #20     Jul 18, 2019