| | | | TURNMIRE TRADING NEWS MINUTE
Rate Cuts Aren’t Bullish
On yesterday’s Morning Monster show, Jeffry Turnmire delivered a critical analysis of the current interest rate situation and its implications for the economy and the markets.
His message was clear: be careful what you wish for.
“When the Fed cuts rates, that means there’s problems in the economy. They don’t cut rates because everything’s good. They cut rates because there’s problems in the economy.”
Jeffry emphasized that rate cuts by the Federal Open Market Committee (FOMC) are not inherently bullish. Instead, they often signal underlying problems in the economy.
His perspective challenges the mainstream narrative that rate cuts are always beneficial for market performance.
Jeffry continued on, explaining the timeline and effects of rate cuts means that their impact typically takes about 24 months to fully materialize in the economy.
This delayed effect means that right now, the economy is only feeling the full effect of the interest rate raises in the red circle below.
All of the rate raises inside the pale yellow box still have to trickle their way into the economy even though some were implemented back in mid-to-late 2022.
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