In the U.S., it’s a ritual for pundits to guess what our central bankers, aka the Fed, will do next with the fed funds rate, which actually begs a bigger question – WHO CARES??
Read why in this excerpt:
Last week, the Reserve Bank of Australia lowered its daily cash rate target by a quarter of a percentage point to 4.1%. “The degree of freneticism that surrounded both the lead-up and the aftermath of this week’s Reserve Bank rate cut decision bordered on the unprecedented,” a commentator opined in the Australian Financial Review on February 23. Yet, from our perspective, the decision was a no-brainer and not surprising at all:
Since the 1980s, Elliott Wave International has observed that major central banks over time tend to follow market movements in short-term government bonds, which are freely traded. That discovery has huge philosophical implications—mainly, that macroeconomic volatility is self-regulating, rather than something that administrative authorities can control. But it supports our view that the boom-bust nature of history is an immutable process governed by Elliott waves.
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