There's a lot of hype and kind of baked-in BS about the Fed's Jerome Powell set to cut rates today.
He won't.
That's it. That's the story.
The Fed will NOT be cutting rates today. However, they will send a clear signal that they will be cutting rates soon(ish).
Of course, all that depends on whether the economy continues showing strength (no cuts or increases) or shows some signs of weakness (in which case rate cuts will be fully on the table).
There are signs that, while the overall economy is doing well (good GDP, low unemployment, etc.), some companies and industries are showing real signs of peril.
Just look at media. Sports Illustrated laid off nearly everybody. Many news outlets are bleeding employees. The LA Times laid off 20 percent of its staff. I could go on. You can read about all that here and here.
I personally think it's a bad idea to cut rates right now. What the economy needs is stability. They need knowns.
People hate uncertainty. With a stable interest rate environment, while the economy is bristling, the masses can be assured that they can plan for the future.
Cut rates when there are surer signs of economic instability. While my citing the obvious job losses in media and tech (above), it's still safe to say that broad job cuts across the board are not happening.
YET.
The Fed has always adjusted rates on broader economic signals. Be quick but not hasty.
See? The Fed didn’t cut rates yesterday. They won’t the next time they meet either. Or maybe even the time after that.
They want to seem apolitical. However, by September-ish, the pressure on the Fed to cut will be at its peak…heading right into the November election.