Last week, Federal Reserve Chairman Jerome Powell telegraphed to the markets that a rate cut is coming.
There seems to be quite a bit of uncertainty over why the Fed would cut rates so shortly after aggressively raising them — eight times since 2016, with the most recent hike just last December.
Much of the speculation concerning the reason seems to be focused on a shaky economy or politics — after all, it’s that season again.
But make no mistake about it: A rate cut isn’t due to the economy, even if that’s the Fed’s cover story. I think the reality is that the Fed realized it raised rates by too much, too quickly. So basically, it is fixing its own fumble.
