Andy Constan: Fed should cut short term rates and halt balance sheet expansion

Andy Constan: Fed should cut short term rates and halt balance sheet expansion
Fed urged to cut rates and halt growth

Andy Constan, Founder / Strategist at Damped Spring Macro, calls for the Federal Reserve to cut short term interest rates by 50bp, end the increase in its balance sheet, and stop reinvesting runoff proceeds in notes and bonds maturing 7 years and longer.

Constan also recommends the U.S. Treasury increase issuance in longer-term treasuries beyond current levels.

Constan recently discussed the potential for a June rate cut if Warsh is confirmed and Powell resigns, suggesting a shift in Federal Reserve policy direction in his previous commentary. He has also reported a net 0.6 percent loss after underperformance in bearish equity and CLZ6 trades, while Smart Beta strategies posted gains, as noted in an earlier update. These observations provide additional context for his current recommendations on interest rates and Treasury issuance.

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