Powell scared of the fallout of 2019-2020 economic crash
The fed has been holding out on rate hikes and has kept the status quo ever since the return of volatility back in October 2018.
The FED has kept citing the economy as strong, yet they kept interest rates flat instead of raising them. They are now going to decrease rates with a maxed out balanced sheet showing they have no confidence in the current strength of the economy (built purely based on credit and debt) and that the market is so inflated due to the enormous amount of debt that it cannot even sustain a rate of 2.5%.
With all other factors taken into account, if the market is faltering at 2.5%, and continuing to show signs of weakness, The FED has no other choice but to do so and with its balance sheet loaded to the brim, the subsequent shitstorm that this will unleash will be of epic proportion.
I expect interest rates to crater following the stock market. Could be at any time within the next 6-8 months most likely, depending on how fast the economy softens and how rapidly the global economic situation deteriorates.
The FED has kept citing the economy as strong, yet they kept interest rates flat instead of raising them. They are now going to decrease rates with a maxed out balanced sheet showing they have no confidence in the current strength of the economy (built purely based on credit and debt) and that the market is so inflated due to the enormous amount of debt that it cannot even sustain a rate of 2.5%.
With all other factors taken into account, if the market is faltering at 2.5%, and continuing to show signs of weakness, The FED has no other choice but to do so and with its balance sheet loaded to the brim, the subsequent shitstorm that this will unleash will be of epic proportion.
I expect interest rates to crater following the stock market. Could be at any time within the next 6-8 months most likely, depending on how fast the economy softens and how rapidly the global economic situation deteriorates.
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