Podcast: Hanging Around the Highs
|Barry C. Knapp||Sep 23, 2019|
Trade Restriction or Reciprocity, October 'QE Lite' and the end of forward guidance
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Fed Chairman Powell’s justification for the FOMC’s second consecutive ‘insurance’ rate cut was weak capital spending, a worsening global growth outlook and trade policy uncertainty. We agree with all of those, though not so much the policy response. When asked on CNBC Thursday afternoon about our expectations for additional cuts this year we answered ‘zero bid, offered at two, contingent on a trade deal; however, if there isn’t a deal two will not be enough to prevent another serious risk off event. If we learned anything from the 2018 quantitative tightening stock market crash, it is that when the late year favorable seasonality fails, it fails spectacularly.
Barry C. Knapp
Ironsides Macroeconomics LLC
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