As an old saying goes, the hardest part about playing chicken is knowing when to flinch. The Fed cut interest rates by fifty basis points last week, and I think it's safe to describe that as a flinch. Whatever game the Fed was playing, they're not playing it anymore.
So what does this mean going forward? Beats me, y'all. I remember the Fed cutting rates all through the 2008-2009 financial crisis, so cutting rates in and of itself isn't some magic pill of rising stock prices. Until we see the stock market actually start to falter, though, we have to assume that inflation will drive prices higher. We saw this with gold this past week; it's still making new all-time highs.
But this is the reckoning season for stocks. September and October are like swords of Damocles, historically speaking. If there's going to be a crash, then I expect to see it within the next month, because this time of year is when these things often happen. (Late winter/early spring is another danger zone.)
The 2020s have been full of insanity and destruction, and I fear this eldritch horror of a decade isn't finished tormenting us yet. Screw your courage to the sticking place, folks, because you might need it in the days ahead.
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