New York | Updated -- Q: How much of a rate cut did Fed Chairman Jerome Powell deliver to the markets last month when he stopped the runoff of the Fed’s portfolio of securities?
A: Half a point.
Now why hasn’t President Donald Trump reciprocated with some flowers via Twitter for Chairman Powell? But hold that thought.
We are filled with sadness watching members of the Sell Side trying to concoct a rationale for going long banks stocks in front of Q3 earnings. We own bank common (USB) and preferred (USB, BAC, C) primarily for income, definitely not for alpha. Financials have badly under performed the indices for the past year but are still expensive. Thus we feel little need to beat that particular dead horse. Yet so long as there are central bankers who are willing to keep interest rates negative, even the dead can walk among us.