Alright, so Powell's playing games again. Color me shocked. The Dow whipsaws like a caffeinated squirrel, hitting a record high only to faceplant after Powell hints the Fed might pump the brakes on further rate cuts this year. Give me a break.
The Fed, in their infinite wisdom, did lower the benchmark rate by a whole quarter point. Big whoop. That puts it in the 3.75% to 4% range. Supposedly, this is the second time this year they’ve done this. But Powell, in his infinite ability to obfuscate, then throws cold water on the whole damn thing by saying there are "strongly differing views" about cutting rates again in December.
"A further reduction in the policy rate at the December meeting is not a foregone conclusion. Far from it," he says. Translation: We might, we might not. Who the hell knows? It's like watching a toddler try to decide what flavor of ice cream to get. Except the toddler is steering the global economy.
And what happens? The 10-year Treasury yield jumps back above 4%. Stocks that benefit from low rates—Costco, McDonald's, Visa, Mastercard—all take a nosedive. You know, the stuff normal people actually use. Meanwhile, the Nasdaq's partying because Nvidia's market cap hit $5 trillion. As if that helps anyone besides the already obscenely rich.
Speaking of Nvidia, let's be real. Their stock is on a five-day winning streak after announcing some new deals, including a $1 billion stake in Nokia. A billion dollars. It's like they're printing money over there. But is this sustainable? Are we just inflating another tech bubble that's gonna pop and leave everyone else holding the bag? I'm asking a real question.
And the "Magnificent Seven" are all reporting this week, supposedly spending billions on data centers. If they disappoint, the whole market could tank. Are we seriously pinning our hopes on these megacap behemoths? It's like relying on Godzilla to protect Tokyo. Sure, he might save the day, but he's probably gonna crush a few buildings in the process.
I mean, what about the regular Joe? What about inflation? What about the fact that wages haven't kept up with the cost of living in, like, forever? Powell says inflation isn't too far from the Fed's target, but does anyone actually believe that? I sure don't.
Rosen from Angeles Investments says Powell is "reflecting the tension on the Fed between those who favor more aggressive easing and those who are concerned that inflation remains too high, even as the labor market weakens." Translation: They're fighting. They have no clue what they're doing.
Oh, and let's not forget about Trump's meeting with Xi Jinping in South Korea. Trade tensions are easing, supposedly, and Trump's talking about cutting fentanyl-related tariffs on China. Which, offcourse, is great if you're into that sort of thing. But are we just kicking the can down the road here? Are we solving anything, or just delaying the inevitable economic Armageddon? Maybe I'm being too cynical. Nah.
This whole situation stinks of manipulation. Powell's playing the market like a damn fiddle, and we're all dancing to his tune. He giveth, he taketh away. The Dow's up, the Dow's down. Nvidia's soaring, consumer stocks are tanking. It's all a big, pointless game. It's a zero sum game. And the average person always loses.
