50 Basis Points!!!!

Let the Games Begin.

I figured I should do a Fed-Day® desk-clearing post, because today is the most important day in the history of days.

As you may have possibly heard, the Federal Reserve today cut their (in)effective Fed Funds Rate from an astronomical 5.33% to (doing the math…) 4.83% or so, or 50 basis points, to use the scientific term.

This will no doubt save many jobs, mostly those of ex-FOMC members.

The Fed clearly had to cut, because stocks and housing were at all-time highs, with the unemployment rate at a Great Depression level of 4.2%.

This will no doubt lower the cost of living for struggling Americans like Barry Sternlicht and Bill Ackman.

Also, Nvidia is 19% off its peak.

Anyway, this post has plenty of raw meat, above and below the fold, for our 81 million subscribers. Incisive analysis from luminaries such as E.J. Antoni, Bon Scott, Evil Janet Yellen, John Roque, Judy Shelton, Vincent Daniel, Patti Smith, Steve Hanke, Bob Elliott, Michael Kao, Jack Gamble, Melody Wright, Dave Collum, Mel Mattison, David Hay, and George W. Bush, among others.

Enjoy.

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Let’s recap:

Just the facts, from Philip Grant:

“E-Z money aficionados got their 50-basis point rate cut Wednesday, but that wasn’t enough to keep the party going as the S&P 500 dipped 0.3% to snap its seven-session winning streak after jumping nearly 1% in initial response to the move. Treasurys in turn ended the day in the red, as two-year yields rose two basis points to 3.61% and the long bond jumped to 4.03% from 3.96% Tuesday. WTI crude pulled back to $69 a barrel after approaching $71 at lunchtime, Gold briefly touched $2,600 an ounce post-FOMC before reversing to $2,554, bitcoin retreated below $60,000 from a post Fed perch near $61,000 and the VIX settled north of 18, up three-quarters of a point on the day.“

Color commentary from The Credit Strategist:

“Fed cut by 50 bps. The only reason to do this is to try to temper the cost of servicing the deficit & to help Democrats in November. Nothing in economy justifies aggressive easing. Not jobs, not stocks, not housing, not nothin’. Real rates will soon be negative again. We will see at least another 50 in cuts by year end, which will just make everything except servicing the deficit worse (& the deficit is rising so quickly that its servicing cost will only modestly decline).

This is another example of a weak-minded Fed guided by unreliable data. Let the games begin (and buy gold to save yourself, because the Fed is clearly hell-bent on destroying your dollars).”

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Just heard that "the yield curve has un-inverted." Maybe the 2-year has, but nothing shorter.

Also, history shows us that the trouble starts after the curve un-inverts…

Meanwhile, the private bank cartel must be dying to spike this up again…

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Why Rate Cuts Won’t Work: E.J. Antoni on The Fed & U.S. Fiscal Crisis

Very good, and from a PhD economist no less!

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Monetary Policy is so restrictive…

Link

"Here are real interest rates historically considered as they stand.
Do you see a case here for lowering them?"

Jeffrey Tucker

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Janet Yellen is Evil

FOMC Meeting, July 2-3, 1996

CHAIRMAN GREENSPAN. …Can you give me three sentences in conclusion on how you view the question: Is long-term price stability an appropriate goal of the Federal Reserve System?

MS. YELLEN. Mr. Chairman, will you define "price stability" for me?

CHAIRMAN GREENSPAN. Price stability is that state in which expected changes in the general price level do not effectively alter business or household decisions.

MS. YELLEN. Could you please put a number on that? [Laughter]

CHAIRMAN GREENSPAN. I would say the number is zero, if inflation is properly measured.

MS. YELLEN. Improperly measured, I believe that heading toward 2 percent inflation would be a good idea, and that we should do so in a slow fashion, looking at what happens along the way.

[We’re all just lab rats to people like Yellen]

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The financial media hates you: