What’s really happening, and why RRR’s are a warning rather than stimulus, is that the 900 billion is meant to hopefully partially fill in a much bigger and more dynamic funding/liquidity gap that already exists...
The Amazonification of America is accelerating, in the process destroying the legacy brick and mortar sector, which peaked in Jan 2017, and has lost jobs for 7 consecutive months.
With the US-China trade war getting thrust to the backburner, traders will now focus on tomorrow's payrolls report for an indication of any unexpected reversals in the Fed's widely priced in 25bps rate cut on Sept 18.
The new trend of 'Woke Capital', has many free-marketers scratching their heads at how corporate America has hopped on board this wave of Progressivism...
Maybe the rate cut was meant as much to give policymakers something to feel good about for themselves. It certainly has done nothing as far as markets go...
Officials are gearing up to reduce interest rates at their next policy meeting in two weeks, most likely by a quarter-percentage point, as the trade war between the U.S. and China darkens the global economic outlook.
Here comes another paradox: on one hand, the Beige Book describes an economy that is expanding "modestly", and is overall in great shape. On the other, the Fed is widely expected to cut rates by at least 25bps in two weeks...
The premise for China's new strategy is two-fold: (1) frictions between the US and China have gone far beyond trade, reducing China's potential gains in a trade deal; and (2) damage from the higher US tariffs to China's economy has been manageable.
The worst case scenario would be if the market meets the Fed's efforts at easing restraint by an even deeper inversion of the yield curve. This would be immediately read as another "policy error" reaction.
