The markets have reversed part of the effect that occurred after Donald Trump’s resounding victory last November in the presidential elections. Apparently the reason behind this correction has been the change of pace by the Federal Reserve at its last meeting. The rate drop was as expected, but they emphasized that in the current circumstances the margin for future cuts is less than what the almighty market thought. Perhaps what is most surprising is that this change in message has caught everyone off guard. The American economy is growing, inflation is not fully curbed and Trump’s economic policies are not going to help in that regard either. This being the case, what is surprising is that the Fed says that it does not have much room left to continue lowering rates. Standard Related News If The ECB lowers rates for the third consecutive time: what to expect in 2025? Daniel Caballero The monetary institution leaves the price of money at 3% in the last meeting of the year. The subsequent reaction of the market gives rise to several reflections. The first is that more than blaming Powell, what we have to do if anything is thank him. The behavior of the American markets lately was beginning to be worrying and with clear symptoms of priming a bubble. And with these the most important thing is not to let them get too out of hand because it always gets worse later. Thank you Mr. Powell. Furthermore, what has happened in recent days demonstrates what many of us suspected. The vast majority have jumped on the bandwagon that after Trump’s victory there is no alternative but to get on the bandwagon of the American stock market and they have closed their eyes. Therefore, what has happened these days we should take it as a warning to sailors. Of course there are alternatives to American exceptionalism. Today, as always, not running with the pack will be profitable. Maybe today more than ever.
#José #Ramón #Iturriaga #Feds #fault
