Good Wednesday morning. The Feds rate-cutting cycle has arrived. Today at 2PM EST we’ll learn how large the first rate cut will be, followed by Powells presser at 2:30 PM EST. According to the latest CME FedWatch tool the odds of a .50% cut are 65% with a .25% cut having just a 35% probability. 

As much as anything, maybe we should listen to the great Ed Hyman of Evercore, arguably the greatest Wall Street economist for 50 years. Hyman was on Bloomberg yesterday where he said “I’d be shocked if the Fed doesn’t cut by 50”. Hyman rarely makes bold statements like this. It’s also widely believed that Powell reads Hymans work, religiously/daily.

Our view is unchanged. The Fed should absolutely cut by .50%. Now that the markets expect it (CME FedWatch), like Hyman, I’ll also be surprised if the cut is just .25%. However, Tyler (our resident Fed watcher) sees it a bit differently. While he also believes the Fed should cut by .50%, Tyler points out; “remember, this is J Powell w...