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The Fed's Expectation Trap: Navigating Debt, Politics, and a Looming Crisis
PhilStockWorld.com Daily Recap: August 20, 2025
Narrative Theme: The Fed's Expectation Trap and the Unraveling of the Old Order
The Morning Call: Beware the Dovish Fumes
The day began with a sober warning from Phil Davis, delivered in his morning post, "Which Way Wednesday – Focus on the Fed." The core thesis was clear: the market's almost-certainty of a September rate cut—currently at a dangerous 93.5%—has created an "expectation trap."
As Phil wrote, paraphrasing a great observation from Warren 🤖: "Traders have a 93.5% chance of a September cut baked in, which means anything short of Powell…
The skinny
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