Thoughts on Fed rate reduction

[Politigator]

I understand the implications of the downward sloping yield curve, and realize I don't have all the info the Fed does, but cutting rates when the economy is still strong and rates a e already low seems knee jerk. I'm not sure we can artificially engineer a never ending economic upturn.

 

[Politigator]

Maybe it's part of the effort to bail out Deutsche Bank:

"If the situation gets out of hand, the Federal Reserve and other central banks will have no choice but to cut interest rates even if it’s not the best thing for the world economies."
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A Bank With 49 Trillion Dollars In Exposure To Derivatives Is Melting Down Right In Front Of Our Eyes – Investment Watch

They definitely need to be saved. Aside from the Russians they are the only ones who'd lend to Trump, and have billions of losses to show for it.

 

[FireFoley]

As expected the FED cuts the funds rate 1/4 of a point. Also as I expected they have ceased their balance sheet runoff, 2 months earlier than they were going to stop this portion anyway. This in effect is an extra ease. I wonder if the fact that Treasury just announced the other day that the amount of debt that is going to be auctioned in the 3rd quarter was going to be DOUBLE what was initially planned b/c of that dumbass debt ceiling/budget deal that they passed the other day. Going to be tons of Government paper available to be purchased over the next few months so I assume the FED did not want to compete with than and try and sell some of the paper on their balance sheet. All I can think is there will be decent demand b/c just today The Swiss 10 yr paper hit MINUS 3/4 of a point and the German 10 yr. hit an all time low of MINUS 0.45. My how times have changed. People used to flock to numbered bank accounts in Switzerland to hide money and now you have to pay the bank to have them hold that money. It is a race to the bottom. I hope I am alive to see the implosion!