Since the year 2000 every time the Fed has begun rate cuts, the economy was just about to start a recession. The cuts were very fast after the first one in each of these cases. I guess it might be a really good time to start buying bonds if you expect this pattern to continue. This is the 4th time they have begun rate cuts after a time of raising rates since 2000.
The inconvenient truth is our economy/way of life doesn't work with high interest rates anymore. Everything is over-leveraged and the future has been loaned out 1000 times over. Interest rates can't stay above inflation or the house of cards falls over.
Raising interest rates was never really the fix to begin with IMO (and the fed admitted as much too), more taxes were, especially at the top end. But congress can't be bothered to do that, so the fed had to act with the tools it had available.
There have only been 3 events over the last 25 years. But that's a pretty long time to draw a conclusion from. The Fed isn't random - they see things and make decisions based on them. Every time we have faced a recession they lowered rates. I'm guessing if you go back further than 25 years you'll see a similar pattern but I haven't looked.
Bank trading never recovered to the "glory days" of the 00s.
Don't work in tech, but I definitely don't see the junior market recovering to what it was pre-2020 and for mature devs its probably "high pay for $BIGCORP but you're in the office" or "WFH for a startup for bad cash pay and equity roulette" for the foreseeable future.
These processes aren't cyclical, they are non-ergodic, one off regimes that once we visit a specific regime, we will not return to that regime.
As someone who has done quite a bit of t-bill and chill investing this regime, I don't see how we can afford to lower interest rates anywhere near like we did the last decade. I am good with 50 bps but it can only go so low this time to keep US government debt attractive.
Then I think of how I could have been a really shitty front end React developer circa 2019. There is no way I could ever get a job doing that now when I see what I can do with Cursor/Sonnet as the same shitty React dev.
Do we have full understanding on how this impacted the tech jobs? There may be other forces at play ie the availability of global workforce to compete with domestic workers of USA through remote work. Previously it was about outsourcing but now any 2 bit startup can easily have a bunch of devs sitting overseas and have a 3P company as their EOR. All the benefits of having an office overseas without any of the associated headaches. And to top it off over 20/25 years of continuous training and empowerment of global workforce have made them not only competitive but relatively superior and younger. So I am not too hopeful that this interest rate cut will really help the domestic US tech job market. I earnestly hope I am wrong.
I have no idea but to be sure it has been pretty bad since autumn of 2001 or thereabouts. That was when it began to tighten and most people began to feel it about midway through 2022 and certainly by late 2022. Most people I know aren't aggressively hiring or plan to and I think most are still bracing for some rough economic times ahead. Eventually though it will recover. Will it be now or a year or 4, who knows.
What? They've been telegraphing that this has been coming for a very long time.
(More than a year, I think.) And it came later than they expected.
50 bps rather than 25 may be a sign that they should have started doing it last time, but that's the only thing I see that even looks remotely like "panic".
