by David Kranzler
Investment Research Dynamics
“The coronavirus could be the proverbial Black Swan event. No one saw that coming. We’ve seen everything else [up to this point] that’s coming. The Fed saw something coming in September and it wasn’t coronavirus.”
All it took was a 10% sell-off in the S&P 500. On Tuesday the Federal Reserve cut its benchmark interest rate by 50 basis points to a target range between 1% and 1.25% over fears the coronavirus will have a negative impact on the U.S. economy. I am confident that the rate cut was targeting the stock market because that’s all the Fed, the White House and Wall Street have as “evidence” the economy is fine. The bond market is suggesting otherwise, the yield curve has compressed to record low yields.