What a difference five months makes for the Fed rate cut outlook. 😉
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If the Fed feels the need to go big because of a weakening economy, that's not bullish. Source: Charlie Bilello
Are we going to see cash moving out of money markets into risk assets? Well, according to this chart by Mike Zaccardi, CFA, CMT, MBA, as a percent of total assets, money market fund holdings are now at 2-year LOWS !!!
Meanwhile, the market see quarterly ECB rate cuts - see chart below. - European Central Bank (ECB) Governing Council member Gediminas Simkus told Econostream Media that he saw a “clear case” for an interest rate cut in September but regarded the potential for another one in October was “quite unlikely.” - Executive Board member Piero Cipollone told France’s Le Monde newspaper that recent economic data so far had confirmed that inflation was slowing, giving scope for the ECB to lower borrowing costs. “There is a real risk that our stance could become too restrictive and harm the economy”. - However, Bundesbank’s Joachim Nagel continued to warn about premature easing, given elevated wage growth and services inflation, in an interview with the Faz newspaper. Source: Bloomberg, T Rowe