If traders have a feeling that there is a prevailing sense of blase disenchantment involving not only US macro data but the overall market, you are not alone. Here is arguably the best, and thus most cynical take, of Friday's impressive seasonal adjustment factor payrolls report, from Citi's Brent Donnelly:
Summer apathy and generally high frustration levels related to poor returns, extreme bearishness and existential questions around the death of price discovery due to central bank meddling.
Fed credibility is near zero so a strong number doesn’t matter much. This Fed is not going to hike two months before an election where the Republican candidate is seen by many as unfit to lead.
Read more ....
WNU Editor: When I read this story 3 weeks ago .... US interest rates to stay unchanged for at least two months, says Fed (The Guardian) .... I said to a friend of mine who is heavily involved in the markets that he did not have to worry .... the U.S. Fed is going to do nothing that will disrupt this economy from now to the election. The reason for my analysis .... raising interest rates would impact the economy .... starting with the stock markets, followed by an impact on the value of the U.S. currency. And since any disruption in the economy would benefit Donald Trump .... the priority for the US Fed would be to keep a lid on things as much as possible .... and postpone the hard decisions until after November. Is this a cynical view on how the U.S. manages its economy .... yes. Is the U.S. Federal Reserve trying to influence the election .... you tell me.
5 comments:
In the utter absence of Kenesian Economic Policies and continued Austerity, 0.9% "Growth", ( which mostly consists of Hedge Funds moving money between accounts and Corporate stock buy backs), incomes flat or negative, McJob creation, the only option the Fed has, is keep interest rates low, they may even go negative.
JJ can run a business, but he has no idea what money is.
The fed going negative interest rate. Oh Gods, NO!. That would match Europe and Japan.
We all know Europe is nirvana or utopia (whichever is better).
Maybe JJ could pay his workers in cigarettes!
On the bright side, Anzino, Trump's promised to raise the Fed Rate to 25%,
That means mortgages and LOC's at 34%, credit cards at roughly 40%, that US Debt should be paid off in no time.
Trump's plan is to retire $3.2 Trillion a year through taxes and interest rates over 8 years,
In other words, turn 98% of the current US budget, over to debt release.
Jay,
Thank you for the information on Mr. Trump's plans on interest rates. While I'm aware of his plans to cut taxes and freeze regulations, I was not aware of this. While the tax cuts and freezes in regulations are needed and long overdue, increasing interest rates in this fashion would be extremely harmful.
If this gets US debt paid off, this will be a good thing as it will position the US for long-term economic growth and perhaps even make the US competitive in the global market place. I sure hope and pray it works out.
Post a Comment