Finger On the Scale?

[Jolly]

Is the Fed rate cut politically motivated?

Biggest cut in 16 years...

[Horace]

It didn't appreciably move the market, so I wouldn't worry too much about it.

[jon-nyc]

The market had baked it in since the last inflation numbers came out. Though there was some debate over 1/4 pt vs 1/2.

[jon-nyc]

Re the 16 year thing….

It’s been since the housing bubble that we had a federal funds rate high enough for a half point decrease to be feasible.

When the federal funds rate is, say, 1.0, a 0.5 cut is inconceivable

[Horace]

looking forward to someday refinancing.

[Jolly]

1/4 is defendable. 1/2 seems like a lot, especially in light of the unemployment numbers.

[jon-nyc]

Are you saying the unemployment numbers are good?

[Jolly]

No, I'm saying that the numbers aren't good, especially in manufacturing. But by over juicing the economy by cutting rates too fast, are we risking inflation/recession, ultimately leading to even worse unemployment numbers?

[jon-nyc]

His (Powell’s) view is that inflation has been tamed, so the other goal of unemployment reduction can be prioritized.

“Our patient approach over the past year has paid dividends,” Jerome H. Powell, the Fed chair, said during his news conference. But now “the upside risks to inflation have diminished, and the downside risks to unemployment have increased.”