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Palum

Palum

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Creslin said:
I mean that was about as dovish as you could have possibly expected. I never can tell what the market will do on a given day but 150k of my personal money went in when we dropped back to flat on the qs on him saying no negative rates. (Wtf retarded algo expected him to say rates are trending back to 0 or negative)
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But if it doesn't go back to 0, how will people who married the house but dated the rate afford it??
 
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Jysin

Jysin

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So dot plot has 2% drop in rates pencilled in by 2025. Yet, we have long end rates spiking / TLT down >1% / DXY V shape recovery post-Fed cut.

Bond market / dollar sniffing out some fuckery?
 
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Lightning Lord Rule

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Jysin said:
So dot plot has 2% drop in rates pencilled in by 2025. Yet, we have long end rates spiking / TLT down >1% / DXY V shape recovery post-Fed cut.

Bond market / dollar sniffing out some fuckery?
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Every time I think I'm starting to understand all of this Wall St/Finance wizard stuff I see a post like this and the illusion is shattered :(

Can you explain this a bit more for the back of the class please, good sir?
 
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Creslin

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Jysin said:
So dot plot has 2% drop in rates pencilled in by 2025. Yet, we have long end rates spiking / TLT down >1% / DXY V shape recovery post-Fed cut.

Bond market / dollar sniffing out some fuckery?
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TLT does better if recession is more likely. Cuts to the extent the bond market wants may actually be less likely the more aggressive the fed is in cutting short term rates because it makes it less likely we see a recession which means no cuts back into the 2% or less range.
 
Sanrith Descartes

Sanrith Descartes

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Lightning Lord Rule said:
Every time I think I'm starting to understand all of this Wall St/Finance wizard stuff I see a post like this and the illusion is shattered :(

Can you explain this a bit more for the back of the class please, good sir?
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Bond market (as evidenced by pricing) doesn't believe the dot plot of 2% drop in rates by 2025.
 
Lightning Lord Rule

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Sanrith Descartes said:
Bond market (as evidenced by pricing) doesn't believe the dot plot of 2% drop in rates by 2025.
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It does seem VERY fast compared to how fast they raised rates to cut 2% inside of 4 months. If they were trying to follow a Volcker-style remedy to the economy when they started raising rates, it should have been RAISE quickly then cut slowly. But now they're professing they're about to do the opposite? Granted, the 80's aren't equivalent to now of course, but still.

EDIT: probably not the thread for this, but this kind of thing lends credence to political factors at play behind the scenes and lots of arm-twisting going on. But who knows.
 
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Sanrith Descartes

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Lightning Lord Rule said:
It does seem VERY fast compared to how fast they raised rates to cut 2% inside of 4 months. If they were trying to follow a Volcker-style remedy to the economy when they started raising rates, it should have been RAISE quickly then cut slowly. But now they're professing they're about to do the opposite? Granted, the 80's aren't equivalent to now of course, but still.
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Correct. It goes back to the discussion of earlier in the week. Are they doing this for political reasons. The bond market seems to be calling bullshit on this not being a political move that is going to stall/get reversed come January.
 
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Lightning Lord Rule

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Sanrith Descartes said:
Correct. It goes back to the discussion of earlier in the week. Are they doing this for political reasons. The bond market seems to be calling bullshit on this not being a political move that is going to stall/get reversed come January.
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I would guess more February-March for the timeline, but my theory is the same.
 
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Sanrith Descartes

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karma said:
well, now you see why I am a fire and forget etf guy lol.
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Think About It GIF by Identity
 
Zog

Zog

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The most interesting part about all of today was only JPmorgan predicted the 50. Coincidence?
 
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Blazin

Blazin

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Zzen said:
50 bps with stocks near ATHs lol

Jerome Burns has cemented his legacy.
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Disclaimer: Super duper not picking on you

BUT...I'm willing to wager you think it's odd to cut with stocks near ATH, and you would be horribly wrong. The Fed has cut rates 20 times since 1980 with the market within 2% of the ATH. The market one year later after those 20 cuts near ATH? Up 100% of the time. Let's stop feeling things and maybe educate ourselves prior to taking our "lol" positions.

You are conflating cutting rates with a weakened economy and that would be true IF you were at neutral already. Moving off of a restrictive policy only needs the restrictive policy to no longer be needed to achieve objectives.
 
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