I really don’t think the market should be rooting for a 50 basis point rate cut
I really don’t think the market should be rooting for a 50 basis point rate cut: Sevens Report Editor, Tom Essaye, Quoted in Barron’s
Odds of a Double Rate Cut Are Rising. Be Careful What You Wish For.
“I really don’t think the market should be rooting for a 50 basis point rate cut in September,” Sevens Report Research’s Tom Essaye told Barron’s. “If the Fed feels like they have to cut 50 bps, then that means they’re all of a sudden worried about the economy, and Fed policy just doesn’t work fast enough to fix those problems.”
The consumer price index for July, due out tomorrow, will give Wall Street a better idea of how inflation stands. Essaye says markets should really be rooting for decent data on inflation and 25 basis point cut in September. In the following days, though, we’ll get updates on the economy that could be more significant signals than the PPI and CPI.
“No one thinks inflation is a problem anymore,” Essaye says. “It’s just a question of how fast it’s declining, right? The bigger question is, what is happening with growth and this does not give any insight into that, and that’s why Thursday’s data is also going to be important.”
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