The bears den

[weng0202]

Markets will sell off if there is no rate cut.

Hope that happens, create a chance for us to buy in.

 

[revhappy]

Listen to other Fed officials, Clarida, Williams, Bullard, Kashkari, all have indicated cuts are coming. So they have telegraphed the markets very well.

 

[coolhead]

Fed fund rate futures is pricing in 100% probability of July rate cut. I read somewhere, Fed has never disappointed markets when the probability was so high.

you remembered reading an article i posted here which lamented how bad the market is at predicting the fed decisions? And you even commented it is interesting. Fed will disappoint the market next month. Still have to see economic figures for July/Aug before we can tell about Sep.

 

[3dfxplayer]

There is still no justification for a rate cut imo. These are just bits and pieces of data which will is rather premature for the Fed to cut. The real serious figures (inflation, GDP, unemployment, labour force participation) have not worsen yet.

No justification?

https://www.yardeni.com/pub/citigroup.pdf

The last time this was at -70 or more was in 2017, the federal funds rate was only 0.5% back then.

 

[coolhead]

No justification?

https://www.yardeni.com/pub/citigroup.pdf

The last time this was at -70 or more was in 2017, the federal funds rate was only 0.5% back then.

Let's go back to basics. I did a simple google search on "US federal reserve dual mandate" and got this KPI that the Fed has to achieve: The U.S. Congress established three key objectives for monetary policy in the Federal Reserve Act: maximizing employment, stabilizing prices, and moderating long-term interest rates. The first two objectives are sometimes referred to as the Federal Reserve's dual mandate.

US unemployment rate is at 3.6%, the lowest it has been since the 2007-2008 crisis.
Predicted US GDP growth rate is 2.1% in 2019 which is not good but not bad as well.

US has inflation rate of 1.8% in 2019, which falls short of 2% target, so a rate cut will help to bring up inflation back to 2% target.
https://www.usinflationcalculator.com/inflation/current-inflation-rates/

Lastly, just some fun tidbits to read about how the market is terrible at making fed interest rate movements.
https://www.marketwatch.com/story/the-market-is-terrible-at-predicting-federal-reserve-interest-rate-moves-chart-shows-2019-06-06

 

[3dfxplayer]

Let's go back to basics. I did a simple google search on "US federal reserve dual mandate" and got this KPI that the Fed has to achieve: The U.S. Congress established three key objectives for monetary policy in the Federal Reserve Act: maximizing employment, stabilizing prices, and moderating long-term interest rates. The first two objectives are sometimes referred to as the Federal Reserve's dual mandate.

US unemployment rate is at 3.6%, the lowest it has been since the 2007-2008 crisis.
Predicted US GDP growth rate is 2.1% in 2019 which is not good but not bad as well.

US has inflation rate of 1.8% in 2019, which falls short of 2% target, so a rate cut will help to bring up inflation back to 2% target.
https://www.usinflationcalculator.com/inflation/current-inflation-rates/

Lastly, just some fun tidbits to read about how the market is terrible at making fed interest rate movements.
https://www.marketwatch.com/story/the-market-is-terrible-at-predicting-federal-reserve-interest-rate-moves-chart-shows-2019-06-06

The unemployment rate is a lagging indicator, so are jobs.

The last part is not quite right, yes fed fund futures are frequently wrong but that only applies to the back month contracts that are far out, its that way because fed fund futures aren't very actively traded, volume in several back month contracts have been huge lately though.

The front month contracts are usually accurate and the closer the fed meeting is the higher the accuracy. I don't see the fed not cutting next month unless the trade war gets resolved before then.

 

[coolhead]

The unemployment rate is a lagging indicator, so are jobs.

The last part is not quite right, yes fed fund futures are frequently wrong but that only applies to the back month contracts that are far out, its that way because fed fund futures aren't very actively traded, volume in several back month contracts have been huge lately though.

The front month contracts are usually accurate and the closer the fed meeting is the higher the accuracy. I don't see the fed not cutting next month unless the trade war gets resolved before then.

If the Fed are to cut rates, how would they justify the rate cutting? That the economic data is bad or to avert a recession? I suppose you have your views just as I have mine, so we will wait out and see then. Of course, if the fed does cut rates, I will be very happy as I am bullish on gold.

 

[Trader11]

Is this a macroeconomics speculation thread?

 

[revhappy]

If the Fed are to cut rates, how would they justify the rate cutting? That the economic data is bad or to avert a recession? I suppose you have your views just as I have mine, so we will wait out and see then. Of course, if the fed does cut rates, I will be very happy as I am bullish on gold.

Do you watch Fed speakers on Bloomberg? I completely agree with your logic. However, these Fed guys are all pimps of the market. This is exactly what I heard, when they were questioned why cut now; they say, inflation is too low and they want to prolong the expansion. They call it the insurance cut .Every single guy said this. Some like Bullard and Kashkari also said, they voted for 50bps cut, for the last meeting!

So this is not even a wait and watch thing. This is a done deal.

https://www.cnbc.com/2019/06/21/feds-james-bullard-wanted-an-insurance-rate.html


https://www.bizjournals.com/twincit...is-feds-kashkari-had-pushed-for-rate-cut.html

https://www.bloomberg.com/news/arti...case-for-easing-monetary-policy-has-increased

 

[Trader11]

Do you watch Fed speakers on Bloomberg? I completely agree with your logic. However, these Fed guys are all pimps of the market. This is exactly what I heard, when they were questioned why cut now; they say, inflation is too low and they want to prolong the expansion. They call it the insurance cut .Every single guy said this. Some like Bullard and Kashkari also said, they voted for 50bps cut, for the last meeting!

So this is not even a wait and watch thing. This is a done deal.

I believe Trump has influence with Wall Street. Which in term influences Fed

 

[coolhead]

Do you watch Fed speakers on Bloomberg? I completely agree with your logic. However, these Fed guys are all pimps of the market. This is exactly what I heard, when they were questioned why cut now; they say, inflation is too low and they want to prolong the expansion. They call it the insurance cut .Every single guy said this. Some like Bullard and Kashkari also said, they voted for 50bps cut, for the last meeting!

So this is not even a wait and watch thing. This is a done deal.

https://www.cnbc.com/2019/06/21/feds-james-bullard-wanted-an-insurance-rate.html


https://www.bizjournals.com/twincit...is-feds-kashkari-had-pushed-for-rate-cut.html

https://www.bloomberg.com/news/arti...case-for-easing-monetary-policy-has-increased

You have your opinion as I do have mine. I'll prefer to think we are at an impasse and I'll leave it as that. We are debating from different angles as I am coming from the data economic points whereas you are coming from what the fed speakers say.

Sent from HMD Global TA-1004 using GAGT

 

[Mecisteus]

You have your opinion as I do have mine. I'll prefer to think we are at an impasse and I'll leave it as that. We are debating from different angles as I am coming from the data economic points whereas you are coming from what the fed speakers say.

I agree with you.

If you look at the data points, FED doesn't need to cut i/r yet.

The FED is pressured by Trump.

 

[BBCWatcher]

US unemployment rate is at 3.6%, the lowest it has been since the 2007-2008 crisis.

It’s the lowest rate since December, 1969.

 

[revhappy]

Blindly following index investing gets you this:

 

[Shortthemkt]

Hope u guys caught the ride down early this morning.

 

[eD1s0n]

Blindly following index investing gets you this:

Investing blindly in anything is never a good idea.
And this is also why stock picking or picking a single country to invest in is risky.

Pakistani holdings is just a small part of a broad based market index like EIMI, and as far as I can see EIMI is still up from may 2017

 

[Shortthemkt]

Doesn't matter what wall street speculates the Fed will do.

All we need to do is to read the chart for clues and identify high probability trades.

Cut out all the noise from CNBC & Bloomberg, just focus on the chart.

 

[peterchan75]

Doesn't matter what wall street speculates the Fed will do.

All we need to do is to read the chart for clues and identify high probability trades.

Cut out all the noise from CNBC & Bloomberg, just focus on the chart.

If you can tell which direction it will go in the second, minute, or hourly chart then it's easy.

 

[Dividends Warrior]

Is this a macroeconomics speculation thread?

It's a Fed speculation thread

 

[coolhead]

Doesn't matter what wall street speculates the Fed will do.

All we need to do is to read the chart for clues and identify high probability trades.

Cut out all the noise from CNBC & Bloomberg, just focus on the chart.

I totally agree on this. It doesn't matter what fed does. It's what the market thinks the fed will do, this is the crucial opinion.

Sent from HMD Global TA-1004 using GAGT