- The 50-basis point cut out of the FOMC has set market expectations for an easing cycle that will provide a tailwind to what would otherwise be the usual pre-election chop.
- Year over year headline PCE is set to fall further this week. Given the Fed’s preference for PCE as a measure of inflation, a low print will provide another boon to risk markets.
- The dollar, yields, and commodities in aggregate are all hovering around long term support. It’s unlikely that these supports will break down any time soon. Sideways action is most ideal.
- The recessionistas are holding on to the argument that, historically, 50 basis point cuts always preceded recessions. They say this with zero analysis as to why and under what circumstances those 50 basis point cuts happened. Eventually they’ll be forced long. Look for a post-election rally through year end.
