2024-07-12 10:34:50 ET
Summary
- CPI data fell 0.1% month over month, with the annual inflation rate at 3%, bringing hopes for further monetary easing.
- The Fed cut may not be significant quantitatively, but will impact sentiment and liquidity.
- Financial assets will continue to rally, but some more than others.
Thesis summary
The CPI data fell 0.1% month over month ("MoM"), putting the annual inflation rate at 3%, and with it, come hopes for further monetary easing.
But what does a Fed cut actually mean? From a quantitative perspective, 0.25 bps won't be significant. However, it will do a lot to shift sentiment and expectations, which will, in fact, impact liquidity....
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For further details see:
What A Fed Rate Cut Really Means