{"id":46452,"date":"2019-05-28T12:12:19","date_gmt":"2019-05-28T17:12:19","guid":{"rendered":"https:\/\/olduvai.ca\/?p=46452"},"modified":"2019-05-28T12:12:54","modified_gmt":"2019-05-28T17:12:54","slug":"46452","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=46452","title":{"rendered":"Financial Markets To Federal Reserve: Time To Start Cutting Rates"},"content":{"rendered":"\n<h3 class=\"wp-block-heading\"><a href=\"https:\/\/www.dollarcollapse.com\/financial-markets-time-to-start-cut-rates\/\">Financial Markets To Federal Reserve: Time To Start Cutting Rates<\/a><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">In late 2018 the US stock market tanked, in effect holding a gun to its own head and threatening to pull the trigger unless the Fed stopped raising interest rates. The Fed, painfully aware that an equities bull market is an existential threat in today\u2019s hyper-leveraged world, quickly caved, promising no more rate increases if the market would just put down the gun.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This worked for a little while. Stocks jumped to new record highs and unicorn tech IPOs started pouring out of Silicon Valley. Normal, which is to say booming, markets were back.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But of course it couldn\u2019t last. An overleveraged economy is not just addicted to new credit, but to&nbsp;<em>ever-increasing levels of new credit.<\/em>&nbsp;So stable interest rates won\u2019t stave off withdrawal. From here on out only steadily (or steeply) falling interest rates will delay the inevitable crisis.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That\u2019s the signal the financial markets are now sending the Fed, as stocks begin to roll back over \u2026<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" src=\"https:\/\/www.dollarcollapse.com\/wp-content\/uploads\/2019\/05\/Stocks-tank-Fed-caves.jpg\" alt=\"S&amp;P 500 markets tank Fed caves\" class=\"wp-image-25047\"\/><\/figure><\/div>\n\n\n\n<p class=\"wp-block-paragraph\">\u2026 bond yields tank \u2026<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" src=\"https:\/\/www.dollarcollapse.com\/wp-content\/uploads\/2019\/05\/10-year-Treasury-yield-May-19-1.jpg\" alt=\"10 year Treasury yield markets tank Fed caves\" class=\"wp-image-25048\"\/><\/figure><\/div>\n\n\n\n<p class=\"wp-block-paragraph\">\u2026 and demands grow for not just patience but acquiescence. Now the question is not if but when the Fed responds with the required cut.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">At the moment \u2013 mostly because the stock market hasn\u2019t fallen very far \u2014 there\u2019s still some resistance to lower rates:&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a rel=\"noreferrer noopener\" href=\"https:\/\/www.cbsnews.com\/news\/fed-interest-rates-federal-reserve-stresses-patience-shows-no-sign-of-cutting-interest-rates\/\" target=\"_blank\"><strong>Federal Reserve is reluctant to cut interest rates, latest minutes show<\/strong><\/a><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">(CBS News) \u2013 According to minutes released Wednesday, Fed officials noted that economic prospects for the U.S. and global economy were improving, while inflation had fallen farther below the Fed\u2019s 2% target.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Some officials \u201cexpressed concerns that long-term inflation expectations could be below levels consistent with\u201d the Fed\u2019s target of 2%. However, officials still believed a return of inflation to the Fed\u2019s 2% target was \u201cthe most likely outcome,\u201d according to the minutes.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">&nbsp;\u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Financial Markets To Federal Reserve: Time To Start Cutting Rates In late 2018 the US stock market tanked, in effect holding a gun to its own head and threatening to pull the trigger unless the Fed stopped raising interest rates. The Fed, painfully aware that an equities bull market is an existential threat in today\u2019s [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[1849,7544,25991,827],"class_list":["post-46452","post","type-post","status-publish","format-standard","hentry","category-economics","tag-financial-markets","tag-john-rubino","tag-rate-cuts","tag-united-states"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/46452","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=46452"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/46452\/revisions"}],"predecessor-version":[{"id":46454,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/46452\/revisions\/46454"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=46452"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=46452"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=46452"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}