XSVM - Above The Noise: Countdown To A Rate Cut
2024-07-26 12:30:00 ET
Summary
- After a year of wondering, data indicates that we can expect to see the first Federal Reserve interest rate cut soon.
- Artificial intelligence demands a massive amount of power, providing a structural tailwind for energy infrastructure.
- Significant leverage, economic excess, plunging survey data, and widening corporate bond spreads aren't in sight.
Dark Helmet: When will then be now?
Colonel Sandurz: Soon.
Dark Helmet: How soon?
As the market assesses the timing of the first Federal Reserve (Fed) rate cut, I began this month's article with the movie Spaceballs and the genius of Mel Brooks. After a year of asking "when will then be now," the policy clarity that investors have desired appears to be forming. The first interest rate cut is expected soon. How soon? The implied rate suggests that the first cut may be coming in September. 1 Inflation has significantly moderated, 2 and US growth is clearly slowing. 3 If the Fed is paying attention, then it's likely that "then" will be now soon.