Al Capital

Why Markets Fell Post Fed Cut

There is little doubt that whatever action the Fed took, the "market" was going to sell, simply because the action was driven by uncertainty and no one likes uncertainty. But the recession risks, at least those presented as probabilities as in Eli's post, are not accurate. The range of recession sentiment varies from about 5% (and I am in that camp) to 100%. Now although the Wall Street Journal presents that data to indicate the average = 36% chance of recession, the data actually indicate that there is no consensus, and that is all. In terms of monetary indicators the chance of recession is very low, and in terms of productivity, the chance of recession is very low.

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