Another Cut Is Coming Why Not Now?

Everyone knows that it is going to happen. Why wait? Ben and the Fed are going to cut rates again this year. It is a fairly well known rumor that will be fact. Bond legend Bill Gross is calling for a rate cut sometime before the end of this year and ultimately getting the Federal Funds rate to 3.75%, a full percent lower than where we currently stand.

Well, if we are going to see another cut...do it at the October 31st meeting. Don't wait. Earnings are coming in fairly low comparable to most seasons. This is going to continue. Cut now. Do it. Get it into the system.

Yes, I have had a change of heart. Ok, not really. I didn't think that the first cut was necessary. I would rather have the issues with liquidity now to avoid a MAJOR issue later with inflation at it's heart. But that isn't going to happen. So if this is how we are planning on fixing this issue...get on it now. Don't pause at the October meeting.

Every time I see a respectable company like Wells Fargo miss estimates and ratchet up their holdings for loan losses...it makes me nervous. Wells Fargo is a conservative lender comparable to most out there. If they are struggling, guaranteed other banks have some nasty earnings surprises out there. At the same time it kind of makes me happy. Every earnings miss by a major player, the closer we get to that next cut that is imminent anyway.

Get on with the cuts already!