Yo-Yo No More!

There is nothing like a sudden 1,000 point drop in the Dow to bring Wall Street’s screaming banshees into a fever pitch for rate cuts. And that’s to say nothing of the so-called Fed watchers who were out in force Friday morning, wagging their collective fingers at the FOMC for waiting too long to cut, after waiting too long to raise. Again.

And so goes the futile perennial rinsing and repeating at the nation’s central bank.

As usual, Zero Hedge didn’t waste any time catching the drift of Wall Street’s instant panic:

Wall Street Begs Fed To Panic: Goldman Sees 3 Consecutive Rate Cuts, JPM Hopes Two For 50bps, Citi Even Crazier

So naturally, the Wall Street gambling houses are flip-flopping in spectacular fashion, as they scramble to see who can become the biggest rate cut dove.

We start with Goldman which begins by commenting on today’s jobs report, and says that “the softening in labor market conditions has now gone beyond the amount that was welcome.” As a result, Goldman now expects “an initial string of consecutive 25bp rate cuts in September, November, and December (vs. our previous forecast of cuts every other meeting)” or in other words 3 cuts in 2024 instead of just 2. While Goldman’s chief economist Hatzius, who for much of the past year was banging the table on just how strong the economy is (and has just flipflopped) notes that “the slowdown in job growth in the July report likely overstates the decline in the underlying trend, if the August employment report is also weak and confirms the slowdown in job growth, then a 50bp cut would become likely at the September meeting.“

But if Goldman’s 3 rate cuts is notable, then JPM’s new call for consecutive 50bps cuts is downright remarkable: that’s right, JPM chief economist Michael Feroli, also a huge bull until, well apparently this morning, decided to upstage Goldman and went a step further, predicting rate cuts in September and November, and not just any rate cuts but double, or 50bps, followed by quarter-point reductions at every subsequent meeting. And the punchline: Feroli parroted what we said earlier…