A rate cut, a rate cut! My kingdom for a rate cut!
With apologies to Shakespeare’s Richard III, that quote does seem to capture the sentiment of far too many investors and analysts, who have developed over the past month, an unhealthy and unrealistic expectation concerning not only the amount of the next imminent rate cut, but also as well, the number subsequently to follow.
In this regards, investors have taken leave of their senses. For a number of weeks, we have heard that not only is a rate cut after the Fed’s meeting at the end of the month a certainty, but also, that it will be at least 50 basis points — that’s a ½ point cut. And, the factual basis for this fanciful assertion? There is none.
It is wonderful to watch how the conventional wisdom on the Street work its way through analysts, economists and financial journalists. It is especially great fun to