While equities celebrated the Fed's bold 50 basis point rate cut with new record highs, caution flags were also waving beneath the euphoric surface. The surge in Treasury yields suggested some skepticism that policymakers can simply move in a straight line toward easier policy as inflation lingers.
FedEx's dire profit warning two days after Chair Powell's optimistic economic message further stoked fears that aggressive tightening may force a hard landing. Rate futures are already pricing in expectations for more cuts than officials have guided, doubting the soft landing storyline.
These mixed signals suggest the Fed still has work to do to truly calm recession anxieties and keep the risk-on party going. Any policy missteps could quickly pull markets back into tightening-induced turmoil.
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'Wheels Are Falling Off' the U.S. Stock Market
The last time the U.S. economy looked like this, stocks didn't move for 16 years...
And many investors lost 80% of their wealth in real terms.
But before you touch any of your holdings – or buy anything – please review my latest warning about the U.S. stock market. It's free to watch.
