So I’m still waiting for someone to explain to me why we are even talking about a rate cut here. Last time I checked the SPX was frolicking near its all time highs while employment figures were at levels not seen since the mid 1960s. Nevertheless another rate cut appears to be all but baked in.
Ten years since the launch of quantitative easing by the Federal Reserve and investors are still pining for yet another interest rate cut. Just let that one roll around in your mind for a moment. A few years back in one of my pertinent posts I mused that we would probably never again see a meaningful interest rate hike during our lifetime. And sure enough, here we are a decade later, still sitting in the same hole we dug for ourselves. Just that it’s a lot deeper now.
Between 2009 and 2016 not a single day passed without someone (rightly) bitching about the inherent moral hazard and long term implications of the Federal Reserve’s various QE initiatives. Which after seven long years and several rounds finally came to an end in late 2015, when the Fed cautiously signaled that it was ready to start raising rates again, albeit ever so gently. And since that announcement not a day passes without someone bitching about the Fed’s ‘irresponsible’ rate hikes. Go figure…
Honestly, I have no idea how we made it through this summer largely unscathed (at least thus far), and -assuming you played along our setups – even managed to accumulate some more ill-gotten (and very politically incorrect) gains. A bit of luck didn’t hurt of course but for the record: we truly worked our butts off in order to squeeze whatever edge we could find out of an impossibly volatile and sometimes erratic market.