Coin Stories News Block: Will Rate Cuts Trigger Boom or Bust? Gold Soars as Central Banks Buy, Fed Warns of Bond Risks
Aug 29, 2024
This discussion dives into the implications of the Federal Reserve's potential rate cuts. It raises the question of whether these cuts signal a forthcoming economic boom or bust. With gold hitting new highs and central banks ramping up purchases, the conversation highlights the growing appeal of safe-haven assets like Bitcoin and gold. Experts critically analyze the relationship between inflation, sound money, and the risks associated with holding bonds in today's volatile market. Tune in for insights on navigating the modern investment landscape!
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Fed Signals Rate Cuts Amid Labor Concerns
- Jerome Powell signaled rate cuts as downside risks to employment grew despite lower inflation.
- Markets cheered but the timing and pace of cuts depend on incoming data and evolving risks.
Jobs Data Mask Growing Weakness
- Recent labor data show cracks: unemployment rising and hiring slowing with large downward revisions.
- Weak underlying jobs data imply rate cuts could reflect economic deterioration, not triumph.
First Rate Cuts Often Signal Market Pain
- Historically the first cut in a new easing cycle often precedes poor asset performance, with average S&P 500 drops near 20%.
- Rate cuts usually respond to economic stress, so markets often fall before central bank liquidity rescues them.