Bang bang. Or should we say, “cut, cut”. Either way, the US dollar’s dead.
We were two-thirds right in our predictions yesterday. The Fed cut both the funds rate and the discount rate by 50 basis points—exactly as we said they would. The cut in the Fed Funds rate to 4.75% is the first in four years and represents a new, disreputable phase in the shabby career of the US dollar. The discount rate—what the Fed charges banks to borrow money—was also lowered 50 basis points to 5.25%.