Market Overview Analysis by Ed Yardeni covering: S&P 500, United States 10-Year. Read Ed Yardeni's latest article on Investing.com
cut the federal funds rate by 25bps yesterday as widely expected. We expected it as well, though we still believe that the now 75bps cut in the FFR since September 18 is too much, too soon because both the economy and the labor market remain strong. In hisyesterday, Fed Chair Jerome Powell acknowledged several times that both remain solid. He said that they are"in a good place."
Notice that he is implying that the FOMC is committed to lowering rates, the only question is how fast. He did say that given the strength of the economy, there's no rush to lower the FFR. So at his latest presser, Powell stuck to his ultra dovish pivot which he first signaled in his August 23 Jackson Hole speech: The Fed will be cutting interest rates for the foreseeable future.
We were surprised that the vote to cut the FFR was unanimous yesterday. Governor Michelle Bowman dissented in the September 18 FOMC meeting. Powell acknowledged that the economic numbers since then have been stronger than expected. One might question why an additional rate cut was needed if the economy is in fact in better shape yesterday than it was at the Fed's last meeting.
Powell was asked a couple of times about the backup in bond yields. He explained that the 75bps rise in Treasury yields since the FOMC cut the FFR by 50bps was mostly a result of stronger economic growth and diminished recession risk. He minimized the impact of higher inflation expectations. But the market's inflation expectations, based on the difference between nominal Treasury yields and TIPS yields, have risen.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
NBC’s Mitchell: Biden-Harris Lebanon Stance ‘Quite a Mixed Message’Source of breaking news and analysis, insightful commentary and original reporting, curated and written specifically for the new generation of independent and conservative thinkers.
Read more »
What to do with Honeywell stock after its sharp post-earnings pullbackThe industrial giant reported mixed third-quarter results compounded by a mixed outlook.
Read more »
The Widely Feared Phantom Recession Is OverMarket Overview Analysis by Ed Yardeni covering: Brent Oil Futures, Crude Oil WTI Futures. Read Ed Yardeni's latest article on Investing.com
Read more »
4 Charts Indicating That the Fed's Jumbo Cut in September Was too DovishMarket Overview Analysis by Ed Yardeni covering: United States 10-Year. Read Ed Yardeni's latest article on Investing.com
Read more »
Wage Growth Outpacing Inflation Isn't Enough - High Prices Still Hurt ConsumersMarket Overview Analysis by Ed Yardeni covering: . Read Ed Yardeni's latest article on Investing.com
Read more »
Modern Monetary Magic Is at Work AgainMarket Overview Analysis by Ed Yardeni covering: S&P 500. Read Ed Yardeni's latest article on Investing.com
Read more »