Thought this was an interesting
article. There were ~4 rate cuts into the end of next year priced in Fed
funds futures last week.
There
are well known areas of slowdown in industry (autos, prime residential,
trade) plus bricks and mortar retail. But apart from that the economy
is growing, so far without a wage-inflation pressure and most of the US
economy is domestic services.
If
the industrial slowdown sectors rebound into year end (for example as
more EVs and PHEVs models are released and as supply chains reroute via
Vietnam or Mexico) then there will be more pressure for the Fed to hike
next year than cut adn the current slowdown will have just been a growth
scare.
Next
week's FOMC will be an interesting one. If the market percives the hint
of a cut in September the market might then price in more than 4 cuts
next year.
https://www.bloomberg.com/news/articles/2019-06-11/don-t-be-so-sure-the-fed-is-cutting-rates
