On July 31, Fed Chair Jerome Powell called the quarter-point cut a "Mid-Cycle" Adjustment.

Powell's statement looks downright ridiculous as Major Currency Wars Escalate in response to "Tariff Man" placing more tariffs on China just a few days after Trump's Lie of the Day when he actually stated "Trade Talks on Track".

Trade talks on track indeed! China Halts All US Ag Imports, Trump Accuses China of Currency Manipulation

Baby Steps

Yesterday, I stated Expect Fed Baby Step Cuts Followed by Shock and Awe Panic. Check out the rate hike odds yesterday compared to the above chart.

Rate Hike Odds Yesterday

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Remaining Calm No Longer an Option


Overnight, thanks to Trump, a 50% chance of just one more cut (assuming a rate cut in September), is now a 50% chance of three or four cuts total (two to three additional assuming September).

A recession is baked in the cake. Remaining calm is no longer a Fed option. The only question is when?

Recession Cause

When recession hits, many will blame Trump. Not me.

Fed bubble blowing policies and fractional reserve lending are to blame.

Trump will not "cause" a recession. However, Trump's inane trade policies will make the recession much worse.

The current setup is very similar to the Smoot-Hawley Tariff Act of 1930.

Smoot-Hawley did not "cause" the Great Depression, but it did exacerbate the problem.

"Tariff Man" Trump is making the same foolish mistake.

Mike "Mish" Shedlock

Expect Fed Baby Step Cuts Followed by Shock and Awe Panic

The Fed has convinced the market that baby step cuts are the order of the day even as the yield curve screams for more.

Powell Calls Rate Cut a "Mid-Cycle" Adjustment

According to Fed Chair Jerome Powell, this may not be the beginning of a rate cut cycle.

The Fed Will Cut Rates on March 18

It's now baked in the cake. The Fed will cut rates on March 18 and most likely at least twice more.

Fed Makes Surprise Inter-Meeting 50 Basis Point Rate Cut

Fed lowers federal-funds rate range to 1% to 1.25% in its first between-meeting move since the financial crisis.

Inversions Despite Surprise Cut: More Cuts Coming

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

Barron's Nonsensical Idea: Cut Rates Like Mad to Avoid Recession

Barron's writer Matthew Klein proposes to stop the recession by cutting interest rates like it’s 1995.

Yield Curve and Spreads Ahead of the Fed Rate Cut Decision

Here is the final snapshot of the yield curve and spreads ahead of the first interest rate cut since 2008.

Interesting Rate Hike Odds: March favors Hikes, December Favors Cuts

Fed fund futures show a hike in March is more likely than a cut. In December, the opposite is true.

Fed Baby Steps Coming: What's Powell Up To?

The odds of a double rate cut in September plunged from 40% recently to 31% last week then to 0% today.