Powell's Rate Cut Pause: More Fog Than Clarity
The Fed's "Fog"? More Like a Smokescreen
So, the Fed cut rates again, 0.25%. Big whoop. Powell's out there talking about "downside risks to employment" and how they need to "shore up economic growth." Translation: they're scared shitless about a recession.
But then comes the real kicker. Powell hinting that another rate cut in December "isn't a foregone conclusion." Isn't a foregone conclusion? Give me a break. After all this song and dance about supporting the economy, he's suddenly playing coy?
It's like they're driving a car with one foot on the gas and the other tapping the brake. Powell even said, "What do you do when you are driving in the fog? You slow down." Except, this ain't fog. This is deliberate obfuscation.
And what fog is he even talking about? The government shutdown that's conveniently blacking out all the economic data? Offcourse, that makes it harder to make decisions. Maybe that's the point.
Dissent in the Ranks
Let's not forget that not everyone's on board with this half-baked plan. Stephen Miran wanted a bigger cut, and Jeffry Schmid wanted no cut at all. Ten out of twelve FOMC members voted for the quarter-point cut. That's not exactly a ringing endorsement, is it? It sounds like a dysfunctional family arguing over Thanksgiving dinner. Federal Reserve cuts interest rates by 0.25 percentage points amid weaker labor market That's according to reports following the meeting.
What's the real game here? Are they really trying to balance inflation and unemployment, or are they just trying to cover their asses while the whole system teeters on the brink?
And speaking of inflation, remember that? They were all Chicken Little about it a year ago, jacking up rates like there was no tomorrow. Now, suddenly, it's all about the "weakening" job market. It's enough to give you whiplash.
I tell ya, this reminds me of when I tried to fix my old car. One problem led to another, and before I knew it, the whole damn thing was falling apart. You try to patch one hole, and three more pop up.
The Waiting Game...or Is It?
Powell says they haven't made a decision about December. He says there were "strongly differing views on how to proceed." So what? That's their job, isn't it? To have differing views and then, you know, decide something?
All this uncertainty is just making the market even more skittish. Stocks dipped after Powell's comments. No surprise there. Investors hate uncertainty more than anything.
Chris Zaccarelli from Northlight Asset Management says investors were "negatively surprised that future cuts might be taken off the table." Translation: Wall Street's throwing a tantrum because the free money spigot might be turned off.
But wait a minute. Is it really about helping the economy, or is it just about keeping the stock market happy? Honestly, sometimes I think these guys are just puppets dancing to the tune of the wealthy elite. Maybe I am the crazy one here...
The FOMC isn't even scheduled to meet in November. They'll be sitting on their hands while the economy does whatever the hell it's going to do.
So, What's the Real Story?
They haven't got a damn clue what they're doing.
