Seventeen years ago this week, Lehman Brothers collapsed.
The Federal Reserve and the U.S. Treasury responded with bailouts, quantitative easing, and eventually zero-interest-rate policy.
Three years later to the day, the Occupy Wall Street movement filled Zuccotti Park with chants of “We are the 99%,” voicing outrage at the very institutions that claimed to save the system.
Now, on this September 17, the Fed is again at center stage — expected to cut rates by a quarter point, perhaps more, under relentless pressure from President Trump.
A reader asked on Monday: “Was Addison serious or being sarcastic when he questioned Fed independence? On this day of all days?”
Seventeen years after Lehman, and fourteen after Occupy, the financial press is still debating whether the Fed is the steward of the economy or the instrument of politics.
For Grey Swan readers, the question is simpler still: to what degree will the Fed roll over completely?
Waiting on Powell
At 2 p.m. today, the Fed will release its rate decision and quarterly projections. Most expect a 25-basis-point cut.
Bond traders are betting more will come before the year’s end. At 2:30 p.m., Jerome Powell will face the press, and investors will parse every word for hints of further easing.
Trump is appealing to the Supreme Court to fire Governor Lisa Cook, after a lower court ruled she could stay while her lawsuit proceeds.
If successful, he’ll gain another seat to fill — tightening his grip on the Fed.
“Officials are expected to lower rates today in an attempt to backstop a shaky U.S. labor market,” Bloomberg reported this morning, “after unrelenting pressure from the president for a ‘big cut.’”
Markets are barely holding their breath. But maybe they should be…
A Market Built on Air
American households now hold a record 45.4% of their assets in equities — more than during the dot-com peak, more than before the Great Depression.
Stock allocations have soared over the last three years, propelled by AI fever and easy liquidity. CNBC notes that “U.S. household exposure to equities has never been higher, surpassing even the most euphoric moments of past bubbles.” (Source: Federal Reserve)
Last month, the valuations for equities surpassed those in 1929, 1965, and 1999, nearly a decade of cyclical booms and busts driven ever more quickly by enthusiasm for tech innovations. (Source: Bloomberg)
A Fed cut today will also be historic. The central bank will be cutting into inflation, which remains above 2.9% by the most conservative estimates.
Plus, record stock allocations and valuations… and questions about the value of the U.S. dollar globally.
Thawing a Frozen Market
In addition to recent concerns over BLS employment data, the housing market helps to explain Trump’s impatience with the Fed.
With housing frozen, the White House wants cheaper money to push buyers even further into the market.
By one measure, U.S. housing is the most unaffordable it has ever been.
Mortgage rates above 6%, combined with record home prices, have sidelined millions of potential buyers, many of whom have locked in when rates were 3% or lower. (source: Re:Venture)
Existing home sales have stagnated, new construction slowed, and transaction volumes collapsed. “The housing market has reached a state of paralysis,” the Wall Street Journal observed, “with neither buyers nor sellers willing to move in today’s rate environment.”
Homebuilders are not optimistic. An index of market conditions from the National Association of Home Builders and Wells Fargo remained at 32 in September — deep in pessimistic territory and one of the lowest levels in years.
A reading below 50 means more builders see conditions as poor than good, underscoring just how deep the freeze runs.
Trump has framed today’s Fed cut as a way to thaw this paralysis. Lower rates mean cheaper mortgages, which in theory would revive demand.
But the irony is obvious: more demand in a market already short on supply could push prices even higher. “You’re not solving affordability with a rate cut,” one housing analyst told the Financial Times. “You’re just reshuffling the deck of who can bid the most.”
The Dollar’s Drift
Lower interest rates tend to also mean a weaker dollar globally. The DXY index appears to be breaking down from a 14-year support level.
“The U.S. dollar typically moves in long, multi-decade cycles,” Tavi Costa warned yesterday, “and this could very well be the start of a new one — likely to the downside.” (Source: Tavi Costa on X).
A falling dollar could help exporters, but it would also further stoke inflation at home, raising costs for consumers already stretched thin.
From Zuccotti Park to TikTok
On September 17, 2011, a few hundred activists gathered in Lower Manhattan, forced by police into Zuccotti Park.
Their hashtags — #OccupyWallStreet, 99% vs. 1% — outlived the encampment and shaped movements to come. Seventeen years later, dissent is measured not in tents but in algorithms.
Following Charlie Kirk’s assassination, firings have spread through workplaces nationwide — employees dismissed for posts that mocked or even questioned his death.
Vice President JD Vance said while hosting Kirk’s show: “Call them out, and hell, call their employer.”
The clash between speech rights and employment contracts reveals how brittle our social fabric has become.
In 2011, protesters aimed their anger at Wall Street bonuses. In 2025, individuals lose jobs over tweets. Both stem from the same fracture: trust that institutions are acting in good faith.
Chunky Monkey Politics
Jerry Greenfield, co-founder of Ben & Jerry’s, resigned this week, citing Unilever’s stifling of the brand’s activist voice. From ice cream to clean energy, corporate speech is narrowing.
Al Gore warned yesterday that Trump’s fossil-fuel push is “hurting U.S. competitiveness,” telling CNN that dismantling renewable support is “a gift to our competitors abroad.” Heh.
Meanwhile, Trump arrived in the U.K. for a state visit, greeted by cannon salutes and royal pomp — though protests followed, including an image of Trump with Jeffrey Epstein projected onto Windsor Castle.
Even Air Force One couldn’t escape turbulence: a Spirit Airlines jet strayed too close, prompting an air traffic controller’s rebuke: “Pay attention! Get off the iPad!”
The Lessons of Antietam and Philadelphia
On this day in 1862, the Battle of Antietam became the bloodiest single day in American history. It gave Lincoln the opening to issue the Emancipation Proclamation, changing the course of the war.
A little further back in history, on this day in 1787, thirty-nine delegates signed the Constitution, replacing the faltering Articles of Confederation with a stronger center.
History rhymes: when the center fails, blood or ink must hold it together.
Today’s center is financial, not military. The Constitution was ballast for a young republic. Occupy tried to rebalance the scales. Lehman’s fall tested the promise of “too big to fail.”
Seventeen years on, we face the same question the Pilgrims faced aboard the Mayflower (yesterday’s historical nugget), the Union faced at Antietam, and the delegates faced in Philadelphia: What keeps the vessel steady?
Markets today run on trust.
Trust in the Fed to manage policy independently. Trust in institutions to report truthfully. Trust in currency to hold its value. As one strategist put it in the New York Times: “In the end, markets don’t run on numbers, they run on confidence that those numbers mean something.”
When that ballast is lost, even a record-setting market can capsize overnight. That’s what makes the opportunities in this bull market even more terrifying.
Interesting, though, don’t you think? This is the trying middle period of Trump’s grand realignment strategy, as we’ve outlined in our research and analysis.
~Addison
P.S. “Liked what you said about trust being the ballast in the ship (economy),” our buddy Scott P. also wrote in. “It sums everything up in the present U.S. of A., and why we are in the chaos and craziness we find ourselves in. Thanks, Addison!”
We’ll press further into this theme in Grey Swan Live! this week with Adam O’Dell, as the Fed cuts rates into a market already priced beyond perfection.
Mr. O’Dell has been warning investors how impending changes to monetary policy are going to force savers out of cash and into the markets… and push gold and gold stocks even higher.
If you have any questions for us about the market, send them our way now to: Feedback@GreySwanFraternity.
