The Fed will cut rates in about 20 minutes. This is what the yield curve looked like ahead of the announcement.

Yield Curve 2019-07-31 Pre-FOMC Announcement

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The yield curve, especially counting the Fed Funds Rate at 2.40% is massively inverted. The 3-month is inverted out to 10 years, but now just barely.

I will do a comparison later today of the changes.

Yield Curve Screaming for Cuts

There is currently no economic basis for a rate cut. Jim Bianco at Bianco research says the yield curve alone is reason enough.

Certainly, the yield curve is screaming for cuts along with President Trump who says Bigger is Better: A "Small Cut" Won't Do.

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How Will the Curve React?

My Reply to Bianco

If the goal is to un-invert the curve I rather doubt even 50 basis points would do.

But why should that be the goal?

The yield inverted yield curve is a symptom, not the problem. I propose a recession is coming no matter what the Fed does.

The bubbles are too many and the economic distortions too great for economic policy to fix the problems.

It is impossible to un-blow bubbles.

Mike "Mish" Shedlock

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Fed Panic! 10-Year vs 3-Month Yield Curve Spread Un-Inverts

Over the past few weeks the 10-yr to 3-month inversion shank. That portion of the curve is no longer inverted. So what?

Checking Back In on the Yield Curve

It's been about a month since I last posted on the yield curve. Let's take a current snapshot.

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Shock and Awe Needed to Un-Invert the Yield Curve: Half-Point Cut Not Enough

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