Fed typically ‘cuts swiftly and does not disappoint market expectations,’ says BAML

Market expectations are growing for a cut to benchmark interest rates, which currently stand at a range between 2.25% and 2.50%, and strategists at Bank of America don’t think that the market is going to be disappointed.

The BAML analysts said that analysis of the past five rating-cutting cycles, 1989-92, 1995-96, 1998, 2001-02 and 2007-08, point to the first rate cut taking place as soon as September. Mounting expectations for a Fed rate reduction, coming only after Powell & Co. delivered the most recent interest-rate increase in December, are supported by a number of factors: combating recessionary signs; boosting stubbornly low inflation, running below the Fed’s 2% target; addressing market anxieties; and, confronting the headwinds produced from the U.S.’s trade conflicts.

Hope for a rate cut, however, have buoyed stocks in recent trade, with the Dow Jones Industrial Average DJIA, +0.71% on pace for its fourth straight gain and the Nasdaq and S&P 500 index SPX, +0.61% on track for their third advance in a row.

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Like taking the hair of the dog, this just prolongs the hangover and makes it worse once it hits.

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Global stocks are rallying as traders see Fed comments as 'central banks to the rescue'Asian and European stocks and US futures climbed on Wednesday after Fed Chairman Jerome Powell hinted a rate cut could be coming. Fed fuled rallies are great for 'traders' but not so great for 'investors'. This is an 11 yr fraud and must stop.
Источник: BusinessInsider - 🏆 729. / 51 Прочитайте больше »