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Jim Cramer, of CNBC, said Tuesday that the Federal Reserve may have a hard time rationalizing another interest rate cut at its next meeting in September because the economy is "a little better than that." that people realize ".
"There is no recession," Cramer said in "Squawk on the Street," citing quarterly earnings higher than the expectations of major retailers this week, including Home Depot on Tuesday morning.
"Fed hawks are going to fight to stop lowering rates, which is obviously not what the market wants," Cramer said after last week's volatility on Wall Street, which dropped room for a rebound in three sessions.
In early trading on Tuesday, Wall Street fell as the bond yield resumed its slide. However, the Dow was able to erase some of these losses, notably thanks to a 4% jump in shares of the Dow Home Depot component.
On Wednesday, the Dow Jones Industrial Average dropped 800 points, or 3%, with bond yields falling to multi-year lows and a 10-year Treasury yield reversing and short-term trading lower than 2-year yield.
This reversal, although brief, has historically signaled a recession on the horizon.
In a context of declining market rates and worries about global economic growth due to the trade war between the US and China, the market pointed to a 100% probability of another reduction of the Fed's key rate next month.
Last month, central bankers cut rates for the first time in more than a decade. The 0.25% move pushed rates into a target range of 2% to 2.25%.
On Monday, President Donald Trump kept up the pressure on the Fed. Twitter twitter markets need a 1%, or 100 basis point, discount "over a fairly short period of time".
But the Fed tends to favor the shallower movements. In fact, the market sees a September rate reduction probability of over 0.25% with less than 3%.
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