| | | | What Has Powell Done?
A 50 basis points cut was on the extreme edge of the prediction curve. And it’s virtually unheard of to do such a big cut unless the economy is in crisis mode. Which, according to Powell during his press conference, the economy is in “good shape.”
Why then the cuts? May I posit one answer?
Trump has been vocal that if he gets into power Powell is out of a job. So, did Powell cut to give Kamala a boost before the election, with the aim to get in her good graces and keep his job?
I think it’s safe to say that the Federal Reserve is not only a monetary institution — it’s a political institution as well. I think these cuts were meant to thwart Trump. You see, it has to be that…
Or the only other option: That the economy is indeed about to crater.
There’s only two rationales for such a heavy rate cut so close to an election. Now, you could argue that the economy is indeed careening off a cliff. But jobless claims came in below expectations today. And the manufacturing index indicates that the economy is humming along quite well.
So, the only conclusion I can come to is that this was a political move. While not a bullet or a bomb, this was meant to derail Trump’s presidency all the same. The only question is…will it work?
Where the Fed Decision Will Take Us
Right now, the markets are soaring on the rate cut news. Stocks will very likely climb for the rest of the year. However, now that the Fed’s forward guidance is in place, trillions of dollar that have been waiting on the sidelines will enter the market.
That, combined with geopolitical tensions and the election, will cause volatility to soar.
Which is why I want to tell you about a very special ticker that can win no matter which way the market is moving…
Because it moves on volatility, not good news or bad news specifically. Which means whatever happens between now and November 8th, we can use this ticker to find trade opportunity.
So, click here to see how we trade the chaos. | | | | |
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