The Fed's 50 bps rate cut is giving off recession vibes

So ... the long awaited interest rate cut at the Sept 18th meeting was 50 bps, rather than 25 bps like the markets expected.

The last time there was an unexpected 50 bps cut was on Sept 18 2007. We now know, with hindsight, was that the US had already entered recession in April 2007; the Benanke Fed was behind the curve. What followed in 2008 was multiple bank failures and a deep recession of a type not seen for 80 years. What we now call the Great Financial Crash.

Surely a once-in-80-years crash can't reoccur a mere 17 years later?

It can if lessons arn't learnt from the previous crash.

The event that has triggered the Powell Fed to cut rates is the BLS revision of the jobs data, removing 800,000 jobs. Clearly the US economy is weaker than was thought.

What does this mean for stocks, gold and crypto?

If the economy is as weak as this Fed rate cut is implying, then stocks are overvalued and there will be a correction. On the other hand the rate cut may rescue the economy.

The switch in focus of the Fed from inflation to jobs means that inflation, which has not yet dropped to the Fed's target of 2%, takes off again. If inflation takes off, that would be good for gold, a traditional inflation hedge. It ought to be good for bitcoin too, dubbed "digital gold" if people can get past their prejudices.