Hidden Concerns Behind Rate Cuts
Recently, Damian Boie, portfolio strategist at Wilson Asset Management, warned about the Federal Reserve's potential rate cut moves. He argues that if the Fed attempts to cut rates by reducing its balance sheet, it could lead to a global liquidity crunch.
Market Reactions and Asset Sales
Markets are contemplating what financial landscapes might look like if the Fed shrinks its balance sheet. Boie notes that once liquidity support is withdrawn, assets like gold, cryptocurrencies, and bonds could face significant sell-offs.
- Gold may lose its safe-haven appeal
- Crypto markets might experience heightened volatility
- Bond yields could rise