"Update on the upcoming before the Fed - interest rate cutsMany people have asked me about my view on how the Fed's interest rate cuts will impact the market.
I have a few thoughts on this, but please note that these are just my personal opinions and should not be considered as trading recommendations!
In the chart, I’m displaying two lines:
- Red: Federal Funds Rate
- Blue: Unemployment Rate
If you look back at history, each time the Fed cuts rates, it typically coincides with economic troubles, although the signs may not be immediately apparent in the early stages.
Initially, Powell’s objective was to combat inflation and achieve a soft landing, but in his most recent speeches, the focus has shifted to stabilizing the economy. This indicates a change in the Fed's assessment of the economic situation, which concerns me as it suggests that we could be heading towards a recession.
History supports this perspective, as the unemployment rate is one of the clearest indicators of recession. Other accompanying metrics, such as GDP, also matter, but during this period, the CPI holds less value for assessing the economic landscape.
In my opinion, it’s just a matter of when the recession will occur. We’ll need to wait for a few key indicators over the next two to three months.
This article is meant for everyone to evaluate the current economic situation. The next article will update on asset classes like Gold, BTC, and stocks, and how they might perform during a recession."
Let me know if you need further assistance!
