Rate Reverse

Yesterday, in a surprise, the Fed strongly suggested it won’t raise rates for a while and that more hikes might be history. Autos and especially housing will be large beneficiaries. What’s troubling is that the Fed is calling timeout with Fed funds a half-point above the rate of inflation, compared to two points historically. This suggests a profoundly weak, but growing, global economy. Thus, no new monetary stimulus is planned.

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