Wall Street has been assuming the Fed will cut interest rates at their Sept. 18 meeting. Well, to be more precise, they’ve been foaming at the mouth, screaming for, and demanding a rate cut.
They might not get it. Philly Fed President Charles Plosser in a speech Sept. 8 said it is not the responsibility of the Fed to bail out failing businesses or support troubled markets. Moreover, he did not give the usual disclaimer that he was speaking for himself only.
It is rare for a Fed President to comment so directly on monetary policy… I didn’t see a disclaimer in Plosser’s speech, so we can assume his speech was cleared, and it seems likely that he is speaking for the Fed. I’d take Plosser’s comments as the Fed saying expectations for a Fed funds rate cut in September are probably too high.
(Fade out to wails of anguish and gnashing of teeth emanating from Wall Street)