|fxtyrant ||Feb 28, 2020 12:23pm | Post# 52957 |
Jeez lisa abramovic, cant believe theres still someone listening to "Analysts" on bloomberg tv....
when 1Y3Y libor swap spread only indicating Fed policy momentum dancing around -20 bps to -17bps.... not enough for a the -25bps needed to actually cut the benchmark rate.
id even dare say we wont be seeing any cuts in the immediate future...
but it will be dovish
expect next FOMC to talk about being accomodative and prepare to take action, will also look at economic data etc etc....
atm S&P500 sell off is a bit overblown compared to the economic data in US. so i dont think FED will cut based on how the US equities are doing.... they'll focus on the underlying economic data. and its not bad enough to take action just yet.... swaps market also surely not pricing in a cut atm.... but we'll see maybe the 1y3y swap spread would hit exactly -25 at the next FOMC....
More from Fed's Bullard to reporters
- debilitating global pandemic is not the baseline case
- we will want to monitor events right up until meeting
- calls situation very fluid, could turn around fast
- US GDP forecast adjustments don't look very severe <- my point
- willing to reactive if virus has major US economic hit
- does not prejudge March FOMC meeting but does not feel Fed has to cut just on the basis of market pricing
- each central bank jurisdiction around the world should act appropriately
- markets may be over estimating coronavirus risks <- who would've thought....
- does not have sense emergency action is right at this point since the situation could resolve itself quickly
- would be willing to reactive there seems to be major effect on US economy but we would have to get to that juncture
- Fed has very good radar for financial stability implications of coronavirus
- equity market valuation are not the US economy <- Precisely my point....
- markets seem to be pricing some serious downside risk, where the line should be drawn is a judgment