What the majority are getting wrong about the FED, is the path and scope regarding rate cuts. They have stuck to their narrative of higher for longer to prevent the dollar from collapsing.

That is why they had to delay until other Central banks began a rate cutting cycle. They needed a cushion so that when they cut, the dollar doesn’t collapse. It is going to decline(and will eventually collapse) but for this cycle they have talked out of both sides of their mouth and achieved their goal. They got the markets to ease financial conditions for them, without taking the official step of cutting rates, yet.

What most are getting wrong, is that it will be only one, maybe two, of 25 basis points each. When the FED finally decides to cut, it will be multiple cuts, of 50-75 basis points. If you are going to cut, it is because the underlying economy is tanking.(something it has already started to do, just not according to the phony jobs and other numbers controlled by the administration)

Biden and his team supposedly, want the cuts before the election to juice the economy in time for the vote. That isn’t going to happen. Not because the FED wants to keep pretending they are independent, although they do try unsuccessfully, to convince everyone they are, but because, if they do cut before November, it will be because the economy is tanking and or the financial system seizes up.

If the optimists are correct and everything is fine, there is no need to cut. If on the other hand, the realists are correct, the “stuff” is about to hit the fan and the FED will have to cut two or even more times, in large size to attempt to save the economy and the system.