Something Isn’t Quite Right

We ain’t gonna get a memo to tell us the exact, full story.

What we know is:

  • Interest rates are down a WHOPPING .80% in very short order.

  • Risky assets all levitated, on the back of this.

  • The Federal Reserve and other central banks have signaled that interest rate increases are over.

  • Logically then, since r is dramatically lower, so NPVs [prices of financial assets] is higher.

But why did the Fed choose this moment, to reverse course? And then, is the Fed really the entire story to why interest rates are THIS MUCH lower, and THIS FAST? Some of it is entirely logical, but not everything. A deep dive for subscribers on why I’m a bit restless. It’s not due to Michigan v Alabama game [it’s a LOCK, we are winning, haha].

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