Really liked this article, one of your best pieces, congrats!
One question, if I may. When you say that in the scenario of the end on an "income-driven recovery", an initial rate cut may uplift stocks, but if the slowdown continues, subsequent rate cuts by central banks may drag stocks lower.
Why subsequent cuts will drag stocks lower?
My 2 cents. First FED cuts will not impact real economy (population) or consumption, but financial institutions and corporates balance sheets.
Regarding your question: my interpretation here is that the Fed won't cut fast unless there's some problem showing up in the data (unemployment, GDP, etc.), which means they will signal markets that the problem is indeed severe, and that market participants will react to that by selling stocks.
Pretense of knowledge, is a perfect encapsulation of current government skills on a global basis. We will all be poorer for it. Well, all but the government elite
Really liked this article, one of your best pieces, congrats!
One question, if I may. When you say that in the scenario of the end on an "income-driven recovery", an initial rate cut may uplift stocks, but if the slowdown continues, subsequent rate cuts by central banks may drag stocks lower.
Why subsequent cuts will drag stocks lower?
My 2 cents. First FED cuts will not impact real economy (population) or consumption, but financial institutions and corporates balance sheets.
Thanks Fabian!
First of, thanks for the compliment!
Regarding your question: my interpretation here is that the Fed won't cut fast unless there's some problem showing up in the data (unemployment, GDP, etc.), which means they will signal markets that the problem is indeed severe, and that market participants will react to that by selling stocks.
Have a great weekend, Jesus!
Understood! There's a thin line there...
Thanks a lot for your work!
Pretense of knowledge, is a perfect encapsulation of current government skills on a global basis. We will all be poorer for it. Well, all but the government elite
Sadly, unless there's a change in public opinion, that's the most probable outcome.
Have a great weekend, Andy!