Report after report is coming out weaker. Will the Fed take notice?
Let's knock the 'world is ending' doom and gloom on the head first off. The US isn't on a greasy pole to recession. What we are seeing is the data slipping and there's a big difference
It's easy to get sucked into seeing bad report after bad report and saying the Fed won't hike until the year 3000 but they may be thinking differently. The data isn't doing them any favours and if the economy isn't in a good enough shape to raise now, that means it was 3-6 months ago, and that further highlights the fact that they've missed the boat on hikes
The Fed trade is becoming very tough. They've sat on their hands at FOMC meetings then come out in the press with completely different views. At some point the views will have to become actions or this market is going to have a real fit
Taking a step back and looking at the big picture the US economy is still steady, and that's all it is. I think we're a fair way from becoming unsteady and that's where the trouble will come
If October is right off the Fed calendar for hikes then it's hard to see what improvement they'll get in the run up to December, and a lot of central banks don't like acting at that time of year
Every day the Fed dithers is another day the market gets more restless. Be ready to see some toys out the pram moments and the October FOMC could be a big one
Courtesy of @victorleonardib
