Nick Timiraos discussed whether the Fed has moved far enough from neutral rates. Analysts argue that if the neutral rate has risen, the Fed may pause rate cuts for an extended period.
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The U.S. Q3 GDP annualized growth rate was revised to 3.1%, exceeding expectations, driven by strong consumer spending and exports. Core PCE, the Fed’s preferred inflation gauge, rose 2.2%, slightly higher than Q2’s 2.1%.
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$Dow Jones Industrial Average (.DJI.US)$rebounded over 400 points intraday but gave up most gains, narrowly ending its historic losing streak. $S&P 500 Index (.SPX.US)$ and $Nasdaq Composite Index (.IXIC.US)$ opened higher but reversed lower. $NVIDIA (NVDA.US)$rose over 1%, snapping a four-day losing streak, while $Tesla (TSLA.US)$ turned negative after an early 4% jump. $Micron Technology (MU.US)$plummeted 16% due to weak guidance.
Following the Fed’s hawkish rate cut, the 2-year/10-year Treasury yield spread widened to a 2.5-year high, with th...

They probably already knew this ahead of time which is why the hawkish cut. Would have been better to not cut yesterday and set things up so that the Fed appears aggressive in keeping inflation at bay, leaving the door open for more cuts next year. The idea is to ensure that the Fed has a handle on inflation. I think they dropped the ball here. A 25bps cut into a strengthening economy is NOT good for inflation expectations.
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🇺🇸 GDP (Q3), 3.1% Vs. 2.8% Est. (prev. 2.8%)
🇺🇸 Jobless Claims, 220K Vs. 230K Est. (prev. 242K)
🇺🇸 PCE Prices (Q3), 1.5% Vs. 1.5% Est. (prev. 2.5%)
🇺🇸 Core PCE (Q3), 2.2% Vs. 2.1% Est. (prev. 2.8%)
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$Micron Technology (MU.US)$ ’s fiscal Q1 revenue met expectations, but weak guidance for the next quarter led to a post-market plunge of 17%. Analysts emphasized its pivotal role in setting the tone for tech stocks. While DRAM price drops weighed on the results, high-bandwidth memory for AI applications drove data center revenue up over 400% year-over-year, accounting for more than 50% of total revenue for the first time.

The Fed’s hawkish stance sent U.S. stocks tumbling. $Dow Jones Industrial Average (.DJI.US)$plunged over 1,000 points, marking its 10th consecutive losing session—the longest streak since 1974. $S&P 500 Index (.SPX.US)$fell nearly 3%, its worst drop on a rate cut day since 2001, while $Nasdaq Composite Index (.IXIC.US)$slumped over 3%. $Tesla (TSLA.US)$ led tech giants lower, falling more than 8%. The semiconductor index dropped nearly 4%, with $Broadcom (AVGO.US)$losing almost 7%. $NVIDIA (NVDA.US)$ turned negative after an intraday gain ...

Powell gave them one.
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▪️ .25bps announced as expected
▪️ forecast for future cuts lowered from 4 to 2 spooking markets
▪️ inflation target also raised to 2.5%, Fed believes inflation is sticky. As eliant capital keeps saying 3% is the new 2%.
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