FANTASTIC FED

In a move largely unexpected just days ago, the Fed cut the Fed funds rate by 50bps! This is an overt acknowledgement that the inflation battle is over, and that rising unemployment is now public enemy #1. While the Fed should have cut earlier, that doesn’t detract from this gutsy call. Fed policymakers expect rates to bottom at 2.875% in 2026. That’s probably too high. Pre-Covid the rate was 1.5%.