Cutting rate does not cut it

Tim Duy believes that the Fed will cut interest rates fast enough and far enough to avoid a recession, and that that—rather than a recession—is the scenario driving the current inversion of the yield curve.

Treasury as very high liquidity demands at the moment. It needs to attract funders rather quickly and high rates do the trick. Any more purchases by the Fed just raises the financial tax on the bond market and we saw that they react by holding back after the last recession.

The Fed is stuck, it lost the path back to where it was.