Your Income Is Going Negative… Here’s the Fix VIEW IN BROWSER
By Michael Salvatore, Editor, TradeSmith Daily In This Digest: - The Fed is between a rock and a hard place
- Why boosting your income is more important now than ever
- A new tool for a low-rates, high-inflation world
- Our upcoming software exploits “price errors” in the market
- A special feed for great free trade ideas
You know what’s worse than being stuck between a rock and a hard place? Noticing that both the rock and the hard place are inching closer. That’s the place where the Fed finds itself today. It’s stuck between two mandates – maintaining stable prices (keeping inflation under control) and maximizing employment. With the Consumer Price Index (CPI) rising from 2.7% to 2.9% over the past 12 months, the rock of inflation is closing in. The Fed’s goal is 2%. So it’s not just far from its goal – it’s losing ground. The hard place of employment is also a concern. The Bureau of Labor Statistics recently reported a downward revision of 911,000 jobs from March 2024 to March 2025. That’s after another revision for the May and June numbers – showing 258,000 fewer jobs than initially reported. If you were in this position, you’d have a tough decision to make. You don’t have the tools to push inflation lower and employment higher at the same time. If you don’t want the rock and the hard place to crush you, you have to push one away and let the other keep closing in. By cutting rates into rising inflation, the Fed has chosen what it sees as the lesser of two evils. It clearly thinks a sagging job market is more of a threat than rising inflation. So it cut short-term lending rates earlier this month. That will make it easier for businesses to grow and hire – at the risk of reigniting inflation. Our job at TradeSmith isn’t to judge whether this was the right move… It’s to help you anticipate the challenges on the horizon… and navigate them with our elite software tools. We employ dozens of data scientists, software engineers, and analysts who to design systems and strategies that help you beat the market. And for months, they’ve been hard at work on a new piece of software that helps you for the exact scenario you face today. It’s called the T-Line. In short, it lets you exploit small, short-term errors in market prices to generate large sums of income over time. Then it plots it out into a simple chart – where you can see the exact “sweet spot” for each trade: 
By pairing this new tool with our top cash generation strategy, we’ve taken what’s already a great way to boost your income… and made it indispensable. For reasons I’ll show you today, this kind of strategy and toolset is essential right now. Because over the next 12 months, the odds are high that your safe income stream is heading to zero… and even lower. To learn more about how to solve this huge problem, sign up right here for our big release event on Tuesday, Sept. 30. There, TradeSmith CEO Keith Kaplan will show you exactly what we’ve been working on and how anyone can use it to create an active income stream from the market. Meanwhile, it’s important you fully grasp how big this problem is… The Fed’s first interest rate cut of 2025 – a quarter-point adjustment down to 4% earlier this month – has graver consequences for your income than it first seems. The Fed’s short-term interest rate guides the yield on short-term Treasury bills – from one to three months. Those, in turn, guide the rates on high-yield savings accounts, Money Market accounts, and Certificates of Deposit. So basically, every risk-free savings account with a decent yield just got worse. Now, a quarter-point cut doesn’t sound all that much worse. But when you’re talking about income, you also have to talk about the other side of the coin – inflation. Every time you look at the income you get on a savings account, you have to subtract the rate of inflation to get the “real yield.” And as inflation rises, the real yield drops. With the CPI rising at an annual rate of 2.9% and the yield on one-month Treasurys at 4.1%, that works out to a real yield of 1.2%. You can see what I mean in the chart below. Factoring in inflation, the yield on savings accounts is down by more than half from the August 2024 peak: 
Going back to 2000, real short-term yields have never been above 1% for long. From June 2023 to the Fed’s recent rate cut was the longest period of risk-free yields above 1% of the 21st century. That matters because people have grown to rely on this safe income for the past few years. I’ve taken advantage of it for my savings, and I’m sure you have, too. But rising inflation and lower rates means your income is getting hit from both sides – another rock and hard place. And if inflation keeps rising and the Fed continues cutting rates, we could see the risk-free real yield drop to zero… and probably go negative. That wouldn’t even be unusual: it’s been the case for most of the 21st century. 
Common or not, that means any safe income vehicle – high-yield savings, CDs, money markets, even directly holding T-Bills – could soon be a money loser. Like it or not, your risk-free income is shrinking fast… Soon, it won’t be enough to just park your cash in savings accounts, CDs, and money markets. So if you want to keep making any real income, you’ll need to get more active with your income strategy. One way to do this is with the new cash-generation technique we’ll be sharing more about on Sept. 30. For years, TradeSmith has been perfecting a strategy that lets you quickly draw hundreds, if not thousands, of dollars from the stock market on a regular basis. You do this by taking small bets with calculated risk on where stock prices will be over a short length of time. When you do this, you collect a stack of cash… wait a few days or a few weeks at most… and then turn around and do it again. I say “calculated risk” for a reason. We have an algorithm called the Probability of Profit. It points you to the best short-term income opportunities in the market at any time. It’s what powers TradeSmith’s Constant Cash Flow advisory. This strategy, with its 98.8% win rate and more than 900 trades under its belt, helps subscribers generate income streams with little risk. And for years, our subscribers have done just that. One subscriber, Ian W., wrote in to say he makes $600 a day with this strategy… Another, Mark C., tells us he made $15,000 over the first seven weeks of this year… And Marion B. says she made between $5,000 and $10,000 a month using our strategy. These are among the best testimonials we’ve received from happy subscribers to Constant Cash Flow, which is also part of our comprehensive Options360 suite. I’m just as happy to report that – as we often do with TradeSmith software –Options360 is about to get a big, free upgrade. It all has to do with those “pricing errors” we’ve identified in the stock market. By showing you how to identify and exploit them, you’ll be able to generate even higher streams of income. I recommend signing up for Tuesday’s launch event right here. Once you do, you’ll be taken to a private website with videos and research articles that’ll give you a lot more details on what’s coming. Before we wrap up, here’s another great source of trade ideas for you… If you aren’t already following Keith on X, you should fix that right now. Every day, he posts one or more of his favorite trade ideas he’s found using TradeSmith software. Whether you’re a TradeSmith subscriber or not, these ideas are 100% free. And one recent example shows just how valuable they are. Here’s Keith writing on X on Sept. 16: 
This is a projection from TradeSmith’s Predictive Alpha Prime software. As a reminder, it uses similar AI technology to ChatGPT to project “profit windows” for stocks – periods when they are most likely to move. Keith showed that the projection for Robinhood Markets (HOOD) was to rise 4.6% by Sept. 29. Just two days later, Keith followed it up with this: 
If you followed Keith, not only did you get limited access to the Predictive Alpha Prime algorithm for free, but you also got a great trade idea that paid out nearly 5% in two days. Here’s another idea Keith shared from Predictive Alpha Prime last Friday: 
This time, Predictive Alpha is projecting Rocket Companies (RKT) to hit $23.27 by Oct. 16 – with historical accuracy of 91.4%. If I know Keith, he’ll follow up on that post once RKT hits the target. Again, this is all 100% free. All you need is a free X account and to follow Keith, which you can do at this link. To building wealth beyond measure, 
Michael Salvatore
Editor, TradeSmith Daily [Disclosure: Michael Salvatore held shares of HOOD at time of writing.] | 
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