The experts think there will be only one more interest rate cut from the Federal Reserve this year. And they expect it this week.
I think the “experts” are wrong. I think there will be more cuts, but it won’t be because the economy is doing so badly. It isn’t.
And if the Fed doesn’t want rate cuts then it will go to the alternative: aggressively pursuing more quantitative easing, which it recently restarted.
I think the Fed will have to cut rates or do more QE because of the political turmoil we are about to see. That chaos will intensify soon.
Even though there is historic stuff going on, I’m going to keep this short because I have covered this all before.
Here’s what is happening this week.
The Fed’s policy-making committee meets Tuesday and Wednesday. And the Labor Department reports employment numbers for October on Friday.
And there should be more coming out very soon from Justice Department Inspector General Michael Horowitz’s report on alleged dirty tricks during the last presidential election.
Wall Street will be thrilled if President Trump looks safe from impeachment and being thrown from office.
But here’s the tricky part for investors: If there are charges against intelligence officials, they are not going to just roll over and die. They will have to fight even harder to make it look like Trump did something criminal. And they will complain that any action that Attorney General William Barr and John Durham, the US Attorney in Connecticut who is looking into this matter, take against the alleged offenders is nothing more than retaliation for the impeachment attempt now crawling through the House.
In other words, the assault from both sides will escalate. It’s going to be an exciting time to be a spectator and a dangerous time to be an investor, especially with stock prices at all-time highs.