75 bp cut
- Thread starter kashirin
- Start date
IMO: does not matter what size of the cut will 50bp or 75bp the markets will go down on that day. Why? 50bp would seems to be small on expectations of 40% that the cut should have been 75bp. Plus note that 50bp is already priced in. 75bp cut - yea, things are so bad, let us cut it agressivly - market will fall on generic economic concerns.
The implicit assumptions just about everywhere around here are:
a) we're in a recession, which would be bad, and
b) the market will go down because of it.
We may be in a recession; personally I think we are. But the world is quite literally awash in liquidity.
The world, as we are seeing, is coming with money, and the US is going to spend it. Bear markets don't happen when there's money looking for a home. Vice versa is when they start, and globally, we're not even close.
a) we're in a recession, which would be bad, and
b) the market will go down because of it.
We may be in a recession; personally I think we are. But the world is quite literally awash in liquidity.
The world, as we are seeing, is coming with money, and the US is going to spend it. Bear markets don't happen when there's money looking for a home. Vice versa is when they start, and globally, we're not even close.
How many bps cut do we need now to avoid a recession by Nov? Try to think like a politician...
Thinking more like John Connor, I'd say "all of them".
By the end of the year we may very well be at 2.75 to 3% fed fund rates.
Long bond / short USD is the short term trade.
Long bond / short USD is the short term trade.
