Hedgeye, Released on 9/26/19 (Recorded on 9/17/19)
*This interview was recorded on 9/17/19
The verdict is in—the Fed wasn’t dovish enough.
As you know, the Fed cut rates 25 basis points yesterday. But the future path for rates is murky at best. There’s more than a fair amount of dissent on the FOMC.
Take a look at the “dot plot” (individual Fed governors’ interest rate targets) for the end of 2019.
Here’s what’s happening:
Five members approved of the 25 basis point cut (but those same governors expect rates to hold steady at the current target of 1.75% to 2% for the rest of the year)
Seven members favor at least one more cut by year end
Five members think rates should end 2019 between 2% and 2.25%
So what’s next?
Outspoken former Fed advisor Danielle DiMartino Booth has an interesting idea you should consider. She discussed it during a new discussion with CEO Keith McCullough.
Danielle DiMartino Booth spent nine years as an advisor to Richard W. Fisher at the Federal Reserve Bank of Dallas. Danielle left the Fed in 2015 to found Money Strong, LLC, an economic consulting firm and launched a weekly economic newsletter She is the author of Fed Up: An Insider’s Take on Why the Federal Reserve is Bad for America. DiMartino Booth began her career in New York at Donaldson, Lufkin & Jenrette and Credit Suisse, where she worked fixed income and the public and private equity markets. Danielle earned her BBA as a College of Business Scholar at the University of Texas at San Antonio. She holds an MBA in Finance and International Business from the University of Texas at Austin and an MS in Journalism from Columbia University.
Mr. Keith R. McCullough is the Founder and CEO of Hedgeye Risk Management LLC. He covers the strategy sector at the firm. Prior to founding the firm, Mr. McCullough was a Partner, Portfolio Manager, and Managing Director at the Carlyle-Bluewave Partners hedge fund. Prior to that, he was a Portfolio Manager at Magnetar Capital; a Founder, Managing Partner and Co-Portfolio Manager at Falconhenge Partners, LLC; and Partner, Executive Vice President and Portfolio Manager at Dawson Herman Capital Management. Mr. McCullough got his start as an Institutional Equity Sales Analyst at Credit Suisse First Boston. He is currently co-chair of the NYC Bipartisan Policy Center; he writes regularly for Fortune and Forbes and is the author of the popular book, Diary of a Hedge Fund Manager.