Doug,
What line of reasoning leads to the statement that,
"If the next Fed meeting due end Sept does not announce an interest rate cut, you will likely see a >6% A.G sell off.
In Friday's speech, Alan said,
1. The US is not an Oasis unaffected by world events.
2. Bias changed to neutral from tightening at the August meeting.
3. The Fed will monitor events since the August meeting.
The trend toward loosening has been established, if and only if one accepts 2 points as a trend.
However, there was no promise, guarantee or even an indication that the Fed would ease at, before or after the Sept FOMC meeting.
IMO, a "safety net" has been put in place where there was prior no perception of one. i.e. A risk factor has been removed or, at least, reduced. This will remain a positive regardless of action taken or not taken at the next FOMC.
Ian.
P.S. What background / credentials in MacroEconomics do you have. |
