The Fed rate cut odds in December jumps to 95% on Polymarket.
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The price of gas at the pump has tumbled to $3.00 - the lowest since May 2021... If you add to this Fed cutting rates (and soon re-launching QE), fiscal stimulus and financial deregulation, that's a lot of stimulus! Source: Zerohedge
Warsh (orange) has been trading inversely (7% to 17% to 5% to 18%). Source: Bianco Research
The headlines are running wild, calling the massive overnight liquidity injection "The Biggest Since COVID!" and predicting the return of Quantitative Easing (QE). Here is the objective truth: ➡️ The Problem: Banks ran into simultaneous, acute, and unexpected shortfalls of overnight cash. This created an immediate, sharp spike in inter-bank borrowing rates (liquidity stress). ➡️ The Fed's Role: The Federal Reserve stepped in not as an asset purchaser (QE), but as the essential backstop. The $13.5B was a tactical operation to stabilize the overnight lending market and prevent a systemic spike in financing costs. ➡️ The Historical Precedent: This scenario is not a predictor of a new bull cycle. It happened in 2019 after Quantitative Tightening (QT) ended. It's a structural issue in the funding markets, not a macroeconomic pivot. 👉 Conclusion: This is not QE. This happened when QT ended in 2019 as well. This is a clear indication of financial plumbing stress. Treat it as a warning light within the system, signaling potential underlying friction. Source: FRED, Brett

