Fed Cutting Interest Rates! Fed Flooding the Market With Money!
And it happened...
Have you been following me for a while? Have you been reading my posts? Then you must have expected this, right? Surely you were ready for this! Ready for more interest rate cuts!
Just like I mentioned a few weeks ago Powell said that the Fed was going to do whatever the Fed needed to do to sustain the "expansion", which anyone that knows a little about economy knows that roughly translated it means" We are going to cut interest rates to allow more people to take out loans and expand their businesses!". And it happened!
After a two days meeting, the Fed announced that it would take down interest rates to a target of 1.75% to 2%. This is the second time in a short time that the Fed is cutting interest rates... something that they hadn't done in 11 years! The issue with cutting interest rates is that it's something that the central banks also do to prevent recessions, and with all the geopolitical issues that I've talked about in some of my posts, what most investors are hearing from the Fed is a giant "Recession!" scream! And even more now!
Read very well what the shaded areas indicate and compare them with the past interest rates cut!
It seems that the Fed is losing control of the machine! In less then 48h they had to inject more than 100 Billion dollars in the financial system to prevent interest rates in the money markets from going out of balance... normally they add and remove whatever they need to, to keep things in balance, but usually they only need to do these types of critical situations during huge crisis and recessions, not in the middle of "stable times"!
Like APompalino said in one of his tweets, this is just adding more fuel to the Bitcoin Rocket! Fuel made out of cutting interest rates and printing more money, the Fed is justing pumping and pumping the rocket, and if the financial system goes under and the ECB and Fed aren't able to prevent this next recession, Bitcoin and gold will surely pump. Keep stacking those sats and saving them up! Secure your future because it ain't going to secure itself!
Additional reading material:
- US Fed cuts interest rates for second time since 2008
- Analyst view: Fed's day two of cash injection into U.S. banking system
- Fed Cuts Interest Rates by Another Quarter Point
I won't have much time to write for some months because of college, expect fewer posts and with less text.