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As expected, the Fed cut rates by 25 bps at this week's FOMC meeting. However, the S&P 500 (SPY) promptly fell 3% for the day in a brutal, exponential selloff that started when the Fed's summary of economic
Markets Tanked After The Fed Cut Rates, But What's Really Changed?
Summary
- Markets reacted violently to yesterday's FOMC meeting despite the meeting containing few surprises.
- The macro issues today are largely the same as six months ago.
- The main difference is that investors have less compensation for the risks they're taking– yesterday's selloff only gave back 3 weeks of gains.
- Mainstream economic models are now saying the Fed should hike– that would be quite a shock to markets.
- Buffett has quietly sold all year, so is the market waking up? Or will it go back to sleep?
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