2019年11月1日星期五

Fed Red Day - Fed Rate Drop Fails to Inspire

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Critical Signals Report
Friday, November 1, 2019
FED RED DAY - Fed Rate Drop Fails to Inspire
Here we go again - another near-miss Fed Red Day on Wednesday.

If you are new to Critical Signals Report, we describe Fed Red Days here.

In short, Fed Red Days occur on days that the Fed lowers interest rates (that's supposed to be good news in a Fed-manipulated Twilight Zone), but markets nevertheless close lower (that's bad news).

Good news is supposed to take the markets up... not down. Down is red - it means your stock investments probably lost money on a day that the Fed lowered rates - hence "Fed Red Day."

This is equally "bad news" because it's signaling that the Fed's magical powers are losing their "magic," and given the sad fact that today the Fed is the market, such red days are particularly disturbing signs.

Today, the Fed lowered interest rates by the expected 25 basis points (0.25%), taking interest rates down by a total of 0.75% since the first rate cut back on July 31 of this year. That's a 30% rate cut since July, but just 0.75% in basis points, raising the question as to whether cutting rates that are this low really matters anymore.

Here's what happened...
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