On the heels of the recent turbulent trading in global markets, one of the greats said, “there is zero chance” of a rate cut next week.
“But What If It Doesn’t?”
June 11 (King World News) – Here is a small portion of what Peter Boockvar wrote today as the world awaits the next round of monetary madness: I have to say that it’s great to see this optimism because so many economic data points are pointing to softer activity, everyone is bulled up on the Fed cutting rates and the yield curve in many parts are inverted.
Small Business Optimism Spikes
The NFIB addressed this all by saying:
“Many observers are arguing that the economy needs another ‘artificial stimulus’ from the Federal Reserve. Not so. Interest rates are low enough to keep credit flowing. What is important is growth that is strong enough to make new investments look profitable.”
The underline (above) is mine. I know many think a Fed rate cut is a layup by July (75% odds today from 83% last week) but it’s not, especially too with the stock market near a record high and with Jay Powell (and non voting member Robert Kaplan) expressing worries over excessively leveraged balance sheets. Here then lies the chasing of the tail where this violent one week stock market rally is a bet that the Fed will give markets all the candy it wants next month but what if it doesn’t?…
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Zero Chance They Cut Next Week
With the 3 yr very sensitive to expectations for Fed policy, what’s this saying about the upcoming meetings? Too early to say for June and July but it’s certainly a message and belief where interest rates are likely going in the next few years on the short end. In this case, that means lower. As for next week, I think there is zero chance they cut as it makes no sense to ahead of the Trump/Xi meeting.
I’ll say again, with only 9 rates to cut assuming they want to get back to zero, which I’m vehemently against, they need to be really judicious here, cognizant too of the stock markets addiction to its policy, the bubbles created and the enormous leverage in the business sector that 10 yrs of policy encouragement helped to create. Also, the long end of the curve has already eased dramatically for the housing market and we’ve seen only a modest help from that.
Also of importance…
Eric King: “Rick, today your company had some very good news that was a further validation of your project in Arizona and your stock traded 20% higher on that news.”
Rick Trotman: “Eric, today was big news with Teck making a strategic investment in Barksdale. Like Osisko and billionaire Eric Sprott, who are our largest shareholders, this investment is yet another huge validation of our project in Arizona that we strongly believe will host a significant discovery. We are heading into what will be a very exciting time for our investors, and the share price reaction to today’s news is just a small prelude to what we believe is coming.” Barksdale Capital, symbol BRO in Canada and BRKCF in the US.
***KWN has now released Egon von Greyerz’s powerful audio interview and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.
***Also just released: What Is About To Unfold Should Be Very Good News For Gold, Silver And Commodities CLICK HERE TO READ.
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