Bond Market Screams for More Rate Cuts: Trump Policies Ensure They Come


Ahead of the FOMC announcement the 10-Year to 1-Month spread was +2.2 Basis Points. The spread is now -27.5 BPs.

The Fed was hoping to steepen the yield curve with its 25 basis point (quarter-point) rate cut. Instead, inversions strengthened dramatically.

Inversions Strengthen

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What Happened?

  1. Bond Yields Crash On ISM Report, More China Tariffs
  2. Global Manufacturing Recession Started, Trump Makes Matters
  3. Another Undeclared War: Trump Threatens Full Naval Blockade of Venezuela

More Rate Cuts Coming

Trump wants more rate cuts.

He will get them, along with a recession.

Mike "Mish" Shedlock

Comments (15)
No. 1-7

Did Trump "want" any of the eight rate increases from the Fed since he was elected?

Did Trump "want" the Great QE to commence the minute he was elected? To the tune of $700 billion being removed from circulation so far?

Yes these things happened.

Seems like the Fed found its "independence" the minute obama left office.

I am sure it was just a coincidence.


CFOs in many corporations are growing restless for the kitchen sink quarter that a recession provides. For them, help is coming.

Many more CFOs are essentially financial caretakers for zombie firms, working business plans that can only survive with free capital. They're slouching from quarter to quarter, waiting for the chapter 7 bullet in their corporate heads. It's coming for them, too.

What a mess central banks, and the politicians that manipulate them, have brought to capitalism, which will now be blamed for the coming carnage.


Tomorrow will be Monday, and Mish is going to blame Trump for that too. People will lose respect for Mish, who used to write a blog about macro economics before he lost his mind. What ever happened to that Mish anyway?

How does Mish visit the grand canyon and then return so completely obsessed with Trump? Did Mish not see the grand canyon? What was the point of communing with nature only to return filled with hate and bile?

The Fed doesn't matter anymore. when Bernanke breached all the Fed's actual official mandates, the Fed stopped mattering. Baby Bush figured the Fed was there to finance his wars. Obama put an unqualified woman in charge for political correctness reasons, figuring interest rate decisions were a formality and he could buy women's groups votes -- there were and are many qualified women who are smart enough to run the Fed, and they are also smart enough to steer clear of politics. And now Trump rightly looks at the Fed with the same disdain as his predecessors from both parties, the difference this time is Mish's unbridled hatred for Trump.

We all know the money center banks have no business model, and are dying. They pay and charge interest rates that have absolutely no connection to Fed Funds.

Chase Bank, before the Fed announcement, was offering 0.03% on checking deposits over $500,000. Everyone has a spare half million to subsidize JPM, right? Savings accounts pay 0.05%!! Try not to spend that all in one place. Meanwhile Chase wants 4.125% for a conforming mortgage... Nothing at Chase hinges off the irrelevant Fed.

BankAmerica, Citi and Wells Fargo offer similarly insulting interest rates, which again have no connection to Fed Funds. No connection at all. The money center banks think the Fed is irrelevant, and they act like the Fed is irrelevant too.


Anyone who knows they can win with more debt want rate cuts.


Sorry for off topic, I think this is important enough to drop in with. This is a message regarding Kashmir. Touted as an anti-terror initiative there is much opinion that in fact it is preparation for war. The twitter account inteldotwav run by a BOS student is aggregating info realtime, he might be frontrunning a little but not by much in my opinion. It would be sensible to read up on the political background, recent legislative moves and so on. I am nothing to do with that account and am not trying to advertise etc., it just happens to be the most reliable source of its kind I have found. Feel free to delete this message if it is too outside rules. Thanks.



On flight home - Regular posting starting this evening


Isn't September the end of selling the Fed off assets from the balance sheet? (like they really thought it would work)

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