Well, now Fed Chair Powell has some 'splaining to do...
While economists were heavily weighted towards a 25bps cut (just nine forecasters in Bloomberg’s survey of 113 (!) economists predicted 50), traders were almost all-in on the idea of a 50bps cut today (odds had sunk intraday from around 70%)... so what was it 'economically' that prompted the 50bps!!
Powell pissed a lot of people off (on one side or the other)...
What was it that Powell and his pals saw that prompted them to slash rates by 50bps?
Stocks and home-prices are at record highs, inflation's path lower has stalled, and the latest labor market data was anything but clearly supportive of a cut (let alone a 50bps cut).
Could it be that The Fed is not as 'apolitical' as it proclaims?
There's also the demands of Senator Elizabeth Warren who urged for a 75bps cut... to help Kamala?
Cue Republicans questioning The Fed's crisis-level rate-cut just two-months out from the election?
Paging Arthur Burns...
...and of course, if this occurs, guess who will get the blame when he wins in November!
Good luck Mr.Powell (said in a James Bond villain tone) as you walk this tight-rope.
Watch Fed Chair Powell speak live (due to start at 1430ET):
