Don’t fight the Fed!
We have all heard this adage each time the Fed embarks on an easing cycle and yet, each time, the market goes through a period of time when it doubts that the Fed will in fact be able to stimulate economic growth. How many times have we heard that the Fed is pushing on a string, that this time is different, and that the easing will not translate into stronger growth. And, indeed, in the current easing cycle, worries abound. In fact, following the July cut in the federal funds rate (the first cut since the financial crisis), the yield curve inverted, investors started to discount the probability of an imminent recession….