by David Haggith
The Federal Reserve on Tuesday gave the market a double-dose of exactly what it thought the market needed, and the market just about died! On the theory that, if a little is good, more is better, the Fed gave a double cut of interest. It did not go as planned.
[…] At first, the medicine hit like nitroglycerin tablets, and the patient’s heart leaped. You can see how instantly the patient bolted up on the operating table in the graph, but the double dose the Fed administered was too much, and by the end of the day the patient’s vital signs were down 785 points.
Simultaneously, bond yields busted through a major psychological barrier with the 10-year yield going deep into a coma below the 1% near-death zone to rest at 0.97%!
“Why?” the onlookers in the gallery overlooking patient and doctors asked. “Why? This was exactly what the market wanted.”