Federal Reserve News Today: Rate Cuts and... What Now?

Alright, so the Federal Reserve, in their infinite wisdom, decided to tap the brakes on interest rate cuts. Another quarter-point, sure, but Powell's already hinting that December's cut "isn't a foregone conclusion." Isn't that just lovely?

The Fog of Uncertainty

Powell said, "What do you do when you are driving in the fog? You slow down." Give me a break. They're not driving in the fog; they're driving blindfolded, with both hands duct-taped to the wheel, straight into a brick wall. The "fog" he's talking about? That's the data blackout caused by the government shutdown. They're making decisions about the entire freakin' economy based on guesswork and vibes.

And now they're "easing" the "Well Managed" standard for big banks? Seriously? We're lowering the bar for the institutions that nearly cratered the entire global economy a decade ago? How about instead of making it easier for them to be "well managed" we just make them actually, you know, well managed? Federal Reserve Updates Supervisory Ratings, Easing ‘Well Managed’ Standard For Big Banks / Fresh Today / CUToday.info

The Fed cut lowers the federal funds rate — what banks charge each other for short-term loans — to between 3.75% and 4%, down from its prior range of 4% to 4.25%. So, they're nibbling around the edges while Rome burns. Fifty basis points in two meetings? That's like putting a Band-Aid on a severed limb.

The Dual Mandate, My Ass

The Fed's got this "dual mandate" – keep inflation low and unemployment low. Except, inflation is still hovering around 3%, higher than their 2% target. And the labor market? Weaker than day-old coffee, with "downside risks to employment" rising. So, they're failing on both fronts, but hey, at least they're consistent...consistently screwing things up.

And who dissented? Stephen Miran wanted a bigger cut. Good for him. Finally, someone with a pulse at that table. Jeffry Schmid wanted no change? Seriously? Is he living in a different dimension?

They're worried about layoff announcements from companies like Amazon, but "the weakness in the job market does not appear to be accelerating." Oh, well that's just great news then! As long as the Titanic isn't sinking faster, everything's fine. Federal Reserve cuts interest rates by 0.25 percentage points amid weaker labor market

The Inevitable Mess

The market reaction was predictable. Stocks dipped because Powell dared to suggest the free money train might be slowing down. Investors are like toddlers – they throw a tantrum the second they don't get exactly what they want.

This whole situation is a disaster waiting to happen. The Fed's caught between a rock and a hard place, and their "pause" is just a way of stalling while they figure out how to weasel out of the mess they helped create.

Offcourse, maybe I'm being too harsh. Maybe Powell and the gang have a secret plan. Maybe they're playing 4D chess while the rest of us are stuck playing checkers. Then again, maybe I should go buy a bunker and stock up on canned goods.

Just Covering Their Butts