The Fed faces a finely balanced set of considerations over
whether to cut by 25 or 50 basis points at its meeting that begins
today. The case for 50 comes down to what Fed officials call
risk management but what might be thought of as regret
minimization. Per former Dallas Fed President Rob Kaplan, if you
cut 50 here and you think the Fed will need to cut again after
that, you are unlikely to regret such a cut even if the economy
chugs along between now and your next meeting. But if you cut 25
and things worsen a lot in the coming weeks, you'll feel bigger
regret as you'll be behind the curve. The case for 25 boils down to
some combination of 1) process issues (i.e., 50 will signal
something more urgent; there's an election soon; communications
were not explicit enough about 50 in the run-up to this meeting),
2) a view that the economy is doing just fine and will continue to
do so with more gradual reductions, and 3) that because financial
conditions are easy (in part because markets expect the Fed to
deliver a string of cuts), igniting risk assets could make it
harder to finish the inflation fight.
It amazes me how much time people on CNBC converse about 50 vs
25 cuts, I mean hours and hours! When all I need to know is whether
there's a negative divergence setting up on the SPX. (there is) No
offense to you, Steve.
It amazes me that people still listen to CNBC at all. It's not
like their nearly useless, short form commentary is a new
phenomenon. It used to be a matter of not having choice but now
there is no shortage of thoughtful, expert level debate and
commentary content available - actual 2 sided discussions where
they tackle trading, finance and econ issues that can't be
understood with 30 second segments (lots of live content if that's
your jam). However, you're not going to find this anywhere in your
cable TV channel lineup. Cable is a waste of money now except for
sports.
You could make an argument for watching CNBC if you're a long
term only investor type since it's an equity sales show at it's
core and you get to hear lots of sales pitches all day long. But I
don't think there's any argument for traders watching
it...especially shorter term traders. There is a ton of actual live
trading content available. Why would you listen to equity sales
pitches from financial advisors when you could be listening to
other traders trading the markets in real time?
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Nickileaks
Posted by steve on 17th of Sep 2024 at 11:33 am
The Fed faces a finely balanced set of considerations over whether to cut by 25 or 50 basis points at its meeting that begins today. The case for 50 comes down to what Fed officials call risk management but what might be thought of as regret minimization. Per former Dallas Fed President Rob Kaplan, if you cut 50 here and you think the Fed will need to cut again after that, you are unlikely to regret such a cut even if the economy chugs along between now and your next meeting. But if you cut 25 and things worsen a lot in the coming weeks, you'll feel bigger regret as you'll be behind the curve. The case for 25 boils down to some combination of 1) process issues (i.e., 50 will signal something more urgent; there's an election soon; communications were not explicit enough about 50 in the run-up to this meeting), 2) a view that the economy is doing just fine and will continue to do so with more gradual reductions, and 3) that because financial conditions are easy (in part because markets expect the Fed to deliver a string of cuts), igniting risk assets could make it harder to finish the inflation fight.
It amazes me how much
Posted by brophy on 17th of Sep 2024 at 11:55 am
It amazes me how much time people on CNBC converse about 50 vs 25 cuts, I mean hours and hours! When all I need to know is whether there's a negative divergence setting up on the SPX. (there is) No offense to you, Steve.
It amazes me that people
Posted by bthefnd on 17th of Sep 2024 at 12:15 pm
It amazes me that people still listen to CNBC at all. It's not like their nearly useless, short form commentary is a new phenomenon. It used to be a matter of not having choice but now there is no shortage of thoughtful, expert level debate and commentary content available - actual 2 sided discussions where they tackle trading, finance and econ issues that can't be understood with 30 second segments (lots of live content if that's your jam). However, you're not going to find this anywhere in your cable TV channel lineup. Cable is a waste of money now except for sports.
You could make an argument for watching CNBC if you're a long term only investor type since it's an equity sales show at it's core and you get to hear lots of sales pitches all day long. But I don't think there's any argument for traders watching it...especially shorter term traders. There is a ton of actual live trading content available. Why would you listen to equity sales pitches from financial advisors when you could be listening to other traders trading the markets in real time?