Inversions Despite Surprise Cut: More Cuts Coming

Mish

This morning the Fed made an emergency 50 Basis point rate cut. More are coming.

Note: The Effective Fed Funds Rate of 1.090 is my guess. The New York Fed will post it tomorrow.

This morning I commented Fed Makes Surprise Inter-Meeting 50 Basis Point Rate Cut.

Strong inversions and Fed Fund Futures were the key to understanding why the Fed would jump 50 basis points.

Guess what. Even after that emergency inter-meeting cut, the yield curve is still inverted.

The Fed is under pressure to cut again.

Mike "Mish" Shedlock

Comments (34)
No. 1-13
Tony Bennett
Tony Bennett

"With the yield curve still inverted, the Fed will be under pressure to cut again."

...

Mr Market knows exactly how many interest rate bullets the Federal Reserve has left.

The FR will still fire them, but to no avail.

Bam_Man
Bam_Man

1.007% right now on the 10-year, and the stock market doesn't seem to like it.

Getting serious now.

KidHorn
KidHorn

The future actions of the FED will mirror what happens with the DOW. I doubt the FED cares about inversion right now.

Carl_R
Carl_R

For those who follow candlesticks charting, the market, in response to the rate cut, has formed dark cloud cover, indicating a reversal to the downside (if confirmed tomorrow).

njbr
njbr

Surprise and panic in the front runners....

Tony Bennett
Tony Bennett

.999 on 10yr

Tony Bennett
Tony Bennett

30yr < 1.60

njbr
njbr

Panic ain't pretty.

Gorby
Gorby

Unfortunately the Fed can't print antibodies.

hmk
hmk

They are irrelevant and have lost all credibilty. A worldwide confederecy of dunces.

tokidoki
tokidoki

Best country on earth. Cutting rates will not create a vaccine, nor will it more quickly produce test kits. These Central Bankers are out of their god**** mind.

Greggg
Greggg

Real guns have magazines, the Fed is using a clip now.

Herkie
Herkie

Well, the Fed resisted Wall Street demands to cut this long, unfortunately they knew that old black swan would come swimming along someday. It finally did and it goes by the name Coronavirus. The real problem is that once the emergency action is taken in response to that black swan it will be just as impossible to unwind as it proved to be when they tried to unwind their balance sheet. So when the virus is no longer seen to be a threat and they try to raise rates back to normal every speck of fecal matereial in the financial world will hit the fan at the same time. Like a Chinese finger puzzle, you can go deeper in but never pull out. Not without a lot of blood and pain and they have shown they simply will not let that happen. My bet is because it is at root wealth inequality and any fix will mean the wealthy get just hammered. This version of capitalism is so broken it is not even capitalism anymore. No attempt to repair it can possibly work. They will have to scrap it and rebuild real capitalism, but in doing so they open the door to socialism because the vast majority of Americans are angry and hurting.


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