The jobs report from ADP was frightening on Wednesday, bringing more fear that the trade war uncertainty and/or some shift in sentiment is cutting business spending, and it seems to be contributing to the rapid “narrative shift” that has happened this year — whereas we were all shocked that the Fed would even consider cutting rates in a booming economy back at the beginning of the year, given the very strong economy and low unemployment, now we’re all lathering at the mouth as we scream for an immediate rate cut to save us from disaster.

Which is all absurd, of course. No one knows when the next recession will come, but the Federal Reserve is again showing its true colors: Focusing on the protection of the investor class and the health of the stock market, which should not be their job at all, and panicking over the possibility that assets might lose value or that inflation might be too low (technically, zero inflation should be the Fed’s goal — that’s “monetary stability” — but the goal is actually 2% inflation, which fuels asset inflation and helps to continue the decades-long gradual shift of the economy’s returns to asset owners and away from wage earners).

Yes, recent economic growth has already been heavily subsidized by the government, in the form of tax cuts and subsidized borrowing costs, but regardless of the source the economy has been fine… GDP is growing at a decent clip, commensurate with the size and demographic “potential” of the country, and unemployment is so low that businesses in urban areas can’t find employees at all. Cutting interest rates here would clearly be a way to mitigate the impact of the trade war on the stock market, and it would continue to distort the economy and over-emphasize the stock market, but when Wall Street starts baying at the moon for a Fed rate cut odds are pretty good they’ll force it to happen.

Which is probably why the government employment report that came out this morning, which was almost as shockingly weak as the ADP report (75,000 jobs added, versus 175,000 expected), will probably drive the market higher still… we seem to be back in a Fed-driven market, where headlines about trade wars cause volatility (and, in fact, probably cause businesses to pull back from hiring or investing), but the warm blanket of ...