CME Fedwatch shows a 95.8% chance of a quarter-point rate cut on September 8.
Thanks to a trade talk announcement with China, the ADP payroll expectation of 195,000 jobs for Friday’s jobs report, some other economic firming, or simply nothing at all, there was a small shift in the odds away from two cuts to no cuts at all.
Yesterday there was a 3.8% chance of two cuts. Today that vanished, replaced by a 4.2% chance of no cut.
Unless the odds shift another 30 percentage points or so, there is little chance the Fed does anything but take out more “insurance”.
The notion of recession “insurance” is silly, but that is the word Fed officials will be yapping about for the next week.
Mike “Mish” Shedlock
Mnuchin wants to reform FHA but preserve the 30 year mortgage. This should be a hoot.
Payrolls and retail sales will probably surprise (far) to the upside. If the UE rate falls to 3.6% and retail sales (ex auto control group) rises by 1% will we still have this rate cut?? Where is this recession ?? stores have never been busier
Aw, Jon got the credit. That’s okay, never intended to be famous on Twitter anyway!
Hard to blame the Fed here. I mean, when you’re in the midst of the Greatest Economy Ever™ you pretty much have to cut!
As noted above Greenspan is being used to set public perception for NIRP’s eventual arrival. That’s how bad things are, Greenspan is seen as the most likable, trustworthy spokesperson for a critical PR campaign.
we are too bad a whole cohort of people screwed up their lives by getting addicted to Opioids (which doesn’t do much to help ones career) which is why labor participation has been “so low”
Powell is such a cherry.
Dropped behind enemy lines. Loosing a volley at any noise. Won’t have any ammo when he REALLY needs it.
Damn, just shot that farmer’s cow …
So I read this morning that Greenspan believes NIRP is inevitably coming to America because the elderly want the security of bonds instead of stocks. I think that is a huge indicator that the FED wants NIRP too, they just don’t want to say it out loud themselves. So I expect more cuts.
I don’t happen to know a lot of elderly whose rotation out of stocks to bonds will be actually driving rates down. Maybe Mish and his billionaire pals might have this kind of impact. But Greenspan said it, so it has to be correct. Right?
“So I read this morning that Greenspan believes NIRP is inevitably coming to America because the elderly want the security of bonds instead of stocks.”
….
Interesting. Just last month Greenspan said US would get negative rates due to international arbitrage. Guess he’ll just keep lobbing till something sticks.
Doesn’t really matter what Federal Reserve does or doesn’t want. Deflationary bust Coming to Amerika, which will drive rates thru the floor.
I don’t see retirees rushing into negative yielding debt. They would did a hole and bury cash first.