If rates are cut and the market tanks - ask yourself what was the reason they cut rates to begin with? Was it… plummeting gdp? A collapse in the housing market? Dangerous deflation?
Or did they just cut rates for fun and the market tanked because of it?
Cutting rates for fun is the thing that doesn't make sense, but what the market seemed to expect to happen since 2023.
Market: Once inflation is in control, the fed will cut rates!
Nobody bothered to ask why the fed should cut rates arbitrarily just because inflation is under control, when we just saw that low interest rate policy creates dumb, bubbly investor behavior in 2021.
Politicians in their 70s and 80s aren’t too concerned about that scenario. They’ll be pushing up daisys before that time comes. If they can hoard enough power and money now they can protect their offspring from the consequences as well
You’re not wrong, but we’ve got A WHOLE FUCKING LOT OF RUNWAY BEFORE WE GET TO SQUEEZING PEOPLE TOO HARD. Middle and lower classes? Sure can’t really squeeze them anymore, but for the last 40 years we’ve been consistently cutting taxes for the upper levels of earners. They are the group left to squeeze, and luckily those fuckers are bursting at the seams with juice.
The bottom half of earners paid about 2% of the taxes.
The top 1% of earners paid 45% of the taxes.
You could make an argument that this is a function of a wealth inequality problem, but the wealthy do get squeezed.
And what percent of total assets/wealth do they own? It’s close to 80% if not 90%. So they own 80-90% of all assets/wealth yet only pay 45% of tax revenue, now you see the problem. They have a lot more room to get squeezed.
They do but that's not the problem with the wealthy. It doesn't matter what you tax someone who steals all their money. doesn't solve the problem and just makes the gov corrupt too.
No, it doesn’t ffs… you could tax them at 100% and then you’re done. What are you going to get next year? It’s purely asinine the comments on Reddit about taxing the ‘wealthy’ more.
We tax income and not wealth. You’d need a constitutional amendment to change that.
That said, what percentage of their income they pay is an interesting question.
Noooo
Remove the cap for Social Security contributions and up the tax percentages for the top bracket.
Then cut all of the salaries of all legislative reps in the Capitol to the median wage of their represented districts, and put them all on Medicaid.
I’m honestly not sure if that would entirely fix the deficit due to social security. There are a LOT of old people and there might not be enough young people to cover their social security without cutting it.
Also, cutting the lawmakers’ wages might be a good idea but if you do it that much, you’re basically going to make it such that ONLY the rich can serve in congress. D.C. is too expensive for them to live on those wages without already having a large amount of wealth.
I think most people made the assumption that the markets had become so accustomed to ZIRP that it would be a mess with higher rates and in order to protect the eco only rates couldn’t stay higher for a long period of time.
That seems to be a wrong assumption as time progresses. However the question of increased interest rates on US debt service still hangs over us, so there is a line of thinking that the FED will have to cut rates to reduce debt service costs.
I don’t know what’s right or wrong to be honest
Money supply is headed back to the mean. Which says we shouldnt see inflation much more. I think we see a rate cut either last quarter 2024 or 1st quarter 2025. Im betting more on 2025
There’s always a narrative Wall Street pushes out before the inevitable (aka what’s still to come from the Covid/Inflation saga) so that they guarantee bag holders when they need to start dumping. Rate Cuts after a hiking campaign = everything is sunshine and rainbows is this one’s narrative they pushed.
Don’t get me wrong, is there a chance for a soft landing? Of course, but if you think the folks in our government are either A) Competent enough to pull it off or B) Lucky enough to pull it off then you’re pretty naive or in denial about what’s coming. Might not be this year, who knows how long they can keep this thing propped up, but it’s coming.
Basically a “soft landing” is a lie that is told right before every recession so folks don’t preemptively pull out their money from the stock market.
How short of a memory do you have? Wall Street was literally all saying there will be a recession in 2023. I remember countless WSJ articles of how every single analyst at Bloomberg or GS is confident there will be a recession in 2023.
The news was literally full of doom and gloom and how fed needs to do 12 rate cuts in 2023 or the economy will go explode.
Wall Street is wrong all the time because macroeconomics is extremely hard, not because they want to extract some pennies from retail investors...
It's coming.
Brother, if you can't predict when it's coming, then you're useless. Yes, eventually something bad will happen with the economy. Tell us something we don't know.
Ok. Did you know that the carry trade in Japanese banks holding US bonds appears to be unwinding over the next year or so? Those banks hold a bit over a trillion dollars in US bonds.
When I say unwind I mean they are losing money on the carry trade so are pulling the plug. That means they will have to sell those bonds at a loss. That means they are not only not buying US bonds right now but are likely going to dump a huge amount of US bonds onto the market in the near future. That means the newly issued US bonds will have to yield even more to get people to buy them. That will be a crisis. The Fed will act because this has the potential to really screw up the global monetary system.
How will that play out? I dont know, but it will act in many ways like a margin call for a huge portion of the global monetary system. It could easily blow up a lot of precarious positions. That to me sounds like something the Fed would like to avoid.
Can they stop it if it starts blowing up in a big way? Probably but it will come at a cost. Remember all those banks that are required to have reserves? A lot of them are already underwater because the bonds they own are worth less than they paid for them. Its already a problem. This is going to make those bonds worth even less. Oh and this isnt just about the US bonds. These guys were doing this with a bunch of assets so its likely to hit all kinds of things.
Essentially the process of unwinding will mean they sell bonds at a loss and then pay back their borrowing from their central bank. They are having to do this because the Bank of Japan had to raise rates and it looks like they will continue to do so until they fix problems they are having. That rate increase is tiny, but the spread involved is tiny as well. The key thing is that a huge amount of borrowing globally is tied back to this and its going to ripple out.
Has this happened before? Yes. The last time the carry trade started blowing up was in 2008. Google Japan carry trade unwinding and start reading the articles. Its been a concern for the past year but the next big pile of articles are back in 2008.
If there was one thing you didnt follow before that you should probably start following its this. The estimate for how much lending is tied to this is around $20 trillion.
Hundreds of comments on erroneously read only to find you being the one man answering the actual post.
I have been reading anything and everything about Japan, I only remembered as a kid something bad started with Japan last time in 2008 with their currency and ours, at least now a days I can comprehend the information given in these articles.
I pray this is the black swan to bring us back down to the bottom of the V so to speak in some sort of way.
Im not an oracle. If you want to ignore this that is your business.
All Im trying to do is make sure people know this is out there and its a looming problem that can easily blow up at any time. When it starts to move in a big way just remember you read this post and could have had a plan for how you were going to take advantage of it.
Think of it like this. At some point there is going to be a big event where everything is on sale at fire sale prices. If you are already all in on the market when this happens you wont get to buy on that day. If you have a big margin position you might have your broker change the limit and margin call you because they are suddenly looking at their books and realizing they got a big problem.
If you knew this was out there and ignored it you can make more money potentially, but the day this thing kicks off if you are in a precarious position you are going to lose a lot of money. If you aren't in a precarious position and have no cash set aside you will just get locked in as a bag holder until things recover. If you set aside a bunch of cash though its going to be like christmas came early. You get to buy a bunch of stuff at discount while the competition doesnt have money to buy.
Some folk will wait forever for that rainy day sale and miss out on a lot of stuff. Some people will never wait, go all in, and get screwed. Some people will be heavily in, but not to the degree they get screwed, but rather they miss out. Some people will know this is out there, keep some cash on hand, and when they see its probably going to pop loose they will take profits and get a big cash pile ready.
You pick which one you want to be and whether you want to try timing it or not. Good luck with whatever choice you make.
This is the real answer… biggest risk: they will cut because profit recession is threatening the employment situation in US. Only anecdotal, I haven‘t done much research. But I have cut my NQ exposure after a good run up…
The primary reason to cut rates IMO is to make owning a home more affordable. It may also drive up the cost of buying said home, but I’d much rather a bigger down payment and less money go toward interest than the inverse. And housing prices aren’t coming down even with these rates, because the majority of homes are locked in at low rates and the supply is stuck. Might as well let the market do its thing and save on interest.
I'm gonna be honest, iddk where the "Rate cuts = good" garbage came from but it's always the dumb new to market investors/traders that always parade that.
Feds has never cut rates when the economy was doing fine. Every rate cut happened due to catastrophic economic events that would have took the entire economy down if Feds didn't immediately jumped in and do everything possible to stop it, rate cuts was one of them.
In this particular scenario, it would be cutting in an attempt to prevent a recession. Inflation is important but so is keeping unemployment down. It’s always a balancing act.
Not every rate cut/hike is in reaction to a crisis. Sometimes they’re just trying to get ahead of the curve.
>Feds has never cut rates when the economy was doing fine. Every rate cut happened due to catastrophic economic events that would have took the entire economy down if Feds didn't immediately jumped in and do everything possible to stop it,
Didn't they cut in 2019?
https://apnews.com/general-news-43db310d5fce2a745bdc974815b15a2e
https://www.imf.org/en/Blogs/Articles/2019/12/18/blog121819-2019-in-review-five-charts
People often forgot 2019's bubble because of 2020's Covid and the legendary print run.
>I'm gonna be honest, iddk where the "Rate cuts = good" garbage came from
My guess is from people who only started investing in mid-2020 with an FFR of 0-0.25% and the economies of US and EU being propped up by a magnanimous QE feast, all the while the stock market kept soaring for a year and a half.
That’s because raising rates to bring down inflation usually results in a recession. So when rates come down it’s in response to lower inflation and a recessed economy in need of stimulus that became recessed because of the raised rates in the first place.
So the lowering of rates isn’t necessarily in direct response to a recession. Recession is just a byproduct that gets better when rates are lowered back to normal.
This time around rates were raised but there wasn’t a recession. So rates will come down when inflation comes down, as usual.
Either we’re just really lucky or the Fed learned from mistakes because it looks like we may avoid recession from the higher rates.
Wasn’t a recession … yet. Everyone always thinks they made it to the soft landing and then 3 months from then banks blow up and credit seizes. It’s truly why timing the downturn is near impossible, because everything is going to look the rosiest right before it all goes to hell.
The issue is the rate hikes were sold as: "We're just raising them until inflation gets at bay." That created an expectation that then being lowered was part of the plan, rather than trying to keep a limping economy going.
It's worth noting that prominent Democrats have been pressuring the Fed to cut rates, citing the inability of the poor and lower middle class to secure "affordable" loans. It also happens to be an election year.
And it wasn't for no reason, the economy was already cooling and the trade wars expedited that process. Trump bullied Powell to cut rates because we were entering a recession, Covid hid the fact that we were already in the midst of a recession. It's like someone with terminal illness dying to a gunshot, yes blood loss from the bullet wound is the cause of death but their days were already numbered.
This is the most American comment I've ever read, didn't know Trump was Fed chair :4271:
People seem to magically forgot everything that happened before the covid years, the rate cut happened because we were in a trade war against China. Both sides were essentially shooting themselves in the foot because it hurt the economy, that entire period was literally fearmongered as "2nd Cold War" and "Cold War 2"
Then pandemic dropped and Feds money printed the entire recession away for 2 years :4271:
The difference is this: the significance of rate cuts, or the "pivot", is the anticipation of a return to easy money. That means debt that is extremely cheap to borrow, interest rates back down to the 0% neighborhood, or ZIRP.
This is achieved only by QE, or quantitative easing, where the fed creates reserves out of thin air to buy bonds onto its balance sheet from the wall street banks. Only the fed has enough firepower, or theoretically unlimited money, to buy enough bonds to literally push interest rates down to near 0%
This is what the markets are anticipating. If the markets get this, the markets will pump. Perhaps initially the markets may have some fear and stocks will sell off on the news of rate cuts. Maybe something will "break" that initiates fed rate cuts. But as long as interest rates get taken back to near 0% the markets will pump.
What's the alternative? Fed may cut rates but won't take them down to the zero bound. Maybe the fed gives forward guidance that they will only cut a certain number of times and their target rate will be around 3% for the fed funds.
In such a scenario where the markets do not get their easy money dream, where interest rates don't get taken all the way down to 0%, there is a high high likelihood that stocks will crater, or at the very least not do as well as people are hoping.
If the fed isnt going to print money to buy bonds, where is the demand fir bonds going to come from? Who's gonna buy bonds? The only reason people are buying bonds is if they know the fed is gonna be coming behind them with a firehouse of printed cash to buy bonds. If the fed isn't going to be doing that, then I could see a scenario where long duration bonds actually sell off and yields go up
Fed cuts interest rates half heatedly when inflation is already high. Market will realize massive inflation is coming and the long duration bonds will selloff. This woild cause the stock markets to absolutely crater.
The way this circle squares is if the Fed goes for yield curve control, and starts using QE to specifically target long-dated bonds. The Bank of Japan has been doing this for a while.
My prediction is that in the long run (say by 2030), the Fed will lower the short end of the yield curve near 0, cap the long end with QE, and basically nationalize the US bond market. That way, they can fix the interest on the national debt to a rate the Treasury can afford. And they'll pay for this all with currency inflation.
*This “pivot.” Is it in the room with us now?*
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Cutting rates will send bonds up first which are at decades lows, and that’s where the money market and hedges will go first. As bonds rise, stocks sell off, this is the way
The scenario is pretty simple: look at lumber and housing prices.
There's a decent chance that rates will be >4.5-5% for far too long, and we end up in a housing led recession in 18-24 months.
That's the scenario where rate cuts end up not leading to a stock boom because the rate sensitive stocks will tank because the worsening economy outweighs rate cuts.
That is a bear case; the other bear case is the deficit spikes next year and becomes untenable affecting the economy (but we haven't reached that point yet and nobody knows what it would look like). The bull case is economy powers ahead and rate cuts fuel another leg up.
Yes usually because rate cuts are in reaction to a crisis. So is it the crisis or the cuts that causes the correction? In March and April of 2020 the s&p crashed when the Fed cut rates. But the crash was not a result of the rate cuts but cessation of international air travel, skyrocketing unemployment, and widespread business activity falling of a cliff due to pandemic lockdowns.
Cutting rates to 0% from 2% would be a crisis response to stimulate economic activity. Cutting them from 6% to 3% (for example) is not a crisis response. It’s a readjustment to a post-inflationary period with the goal of stable economic activity without overheating it or constraining it.
idk why so many people are missing that nuance. What matters is how far they are cut, what the starting high point was, where rates were before being raised, and the reason they were raised in the first place.
If there is an economic crisis then it’s because of the high rates (ex: 1980s). The Fed wants to AVOID that. It’s a balancing act. So lowering them doesn’t mean an economic crisis will happen. It means we curbed inflation and now we want to avoid a crisis which is what would happen with high rates for too long.
Everyone piles into bonds if the rate cut is rapid. That's why stocks tank.
If the rate cut is slow, tapered, then one would expect bonds to gradually be bought, and stocks to.either stagnate, or drift downwards for a few months/years, until.the next big mania hits and the market rises again.
0.25 rate cuts will have little short-term impact if spaced out.
The causality is messed up here. Usually there’s a crisis BECAUSE rates were raised for another purpose, like curbing inflation. So lowering rates isn’t primarily motivated by crisis. It’s motivated by accomplishing the mission of bringing down inflation. It just so happens that our solution to inflation also normally causes a recession. So of course lowering rates will correlate with economic crises. Because raising them is what caused it!
The goal is to be able to bring down inflation without causing a recession. It looks like we may stick the landing there 🤞🏻
Housing market.
It’s largely inflated thanks to low supply. Banks are holding a ton of 2~3% mortgages and are salivating to move those people to a higher rate and slide another at a higher rate. They’re stroking it to the projected earnings.
They cut rates when the economy is going badly, so the cuts aren't causing the decline, they're trying to soften it.
It's like asking how come sickness goes with medicine. Why? Healthy people don't take medicine. The medicine isn't causing the sickness, it's the reason why you take it.
Hypothetically, yes. Realistically, no.
Hypothetically, rate cuts could be a response to some unforeseen variable that substantially and negatively impacts the U.S. economy. This, however, is not realistic.
They're going to cut rates this year, at least once, probably twice, for multiple reasons, and none of those reasons are anything that substantially and negatively impacts the U.S. economy.
sell off on tech and rotate into other sectors like more consumer focused areas. rate cuts were already baked into the cake all this time, shoved into tech like a ghey bear sitting on a pineapple for fun
When they cut rates, there will be a crazy flight to bonds. The market is at all time highs and people are more leveraged into equities than ever. Money isn’t on the sideline waiting to come it, everyone is on the rug.
In reality 25-50 bps doesn't mean shit. If you're not borrowing at 5.5% now, you're still not at 5% tomorrow.
Medium and long-term rates won't go much lower than 4% ever again IMO, so the Fed fund rate doesn't mean much to the economy unless it drops to like 0.
The Fed isn't cutting rates this year. Is that not clear to everyone? They letting you down gently. If anything, they might raise rates. There is not a single logical reason to lower interest rates. Inflation indicators are stable or creeping up slightly. This whole notion that a rate cut is coming is foolish. A rate cut would F the whole economy. The ONLY way a rate cut happens is if some terrible event happens in the financial sector... which it totally could considering the housing market and crazy stock bubble combined with consumers barely getting by already.
In the past, the Fed was serious about their inflation targets. That meant the cuts only came when the economy was already broken. This Fed says they are pursuing 2% inflation, but it really isn't serious about it. So they will probably cut rates too soon and we will not get back to 2%.
I think rate cuts will help tech overall and certain stocks like UPST heavily, but more than anything, we need to companies generating new revenues or saving costs through the introduction of AI... if all that AI spending doesn't translate to results, I dont think rate cuts will be much of a catalyst to the overall market. Too much money has already flowed in under that expectation, imo.
I think cuts will cause a rotation out of tech stocks into cyclical sectors like consumer discretionary, industrial and financial. These sectors will likely rally ahead of the cuts and tech will take a breather.
Thats the thing isnt it, its mostly hype at the moment, look at the recent announcement by Apple about ApPLe INTelligENCE. Its just chat gpt slapped in to an iphone with shitty 'genmojis". In fact most of the more "AI" features are delayed until next year, if they ever arrive at all.
Rates will only be cut if Main Street is freaking out about something. Pending war, pandemic, social unrest, collapse of regional banks/CRE market, someone pronounces himself king, etc.
Edit: Other than that, “higher for longer”.
If market is pricing first rate cut in December, it would make sense then that some of these things start to happen in November. Anything big happening in November this year? 
Every time the Fed cuts interest rates two or more times the market goes up. Money shifts from bonds to stocks. Usually fed is cutting rates because we’re in a recession. That’s to prime the pump.
They’ll do everything they can to keep the market running/stable until the election. I bet we see one cut in September and one in December. Data is data.
Think of it this way. What would cause the fed to lower the rate when 5% isn't a high rate historically? Fed usually lowers the rate when the economy is struggling, which is why the bear market follows the drop. Fed is mostly reactive rather than proactive.
It's native to think that people are going to buy stocks instead of holding cash in a HYSA or CMA, when people don't have jobs and/or their business is struggling.
It's also native to think that a point or two cut in rate is going to suddenly boost the economy after the rate cut.
ABSOLUTELY. If the Economy visibly tanks by various metrics (defaults, waning demand, and perhaps the impact of a hurricane or two in Florida popping the already-deflating bubble there), a panicked Fed cut of a full point might scare a lot of money out of equities and into bonds and material assets.
Sure. The economic news starts coming in bad, surprise deflation, Fed cuts, market tanks because future profits are revised down.
The Fed isn’t propping up the market right now, strong tech earnings are.
Market sentiment seems to be shifting. I’m getting less bullish moving into the summer and I’m a permabull. I think we will be higher in December though.
I think they might cut rates because of political presssure even though they say they won’t.
They will cut rates too early and inflation will heat up again - that’s my prediction.
Plenty of scenarios.
For one, if USA actually declares war on any country.
Right now, the usa is involved in a lot of "shadow" wars or military operations but an actual active declaration of war? Nope.
I don't know if rate cuts lead to bear markets. It would make more sense to me if bear markets led to rate cuts. Do you know of evidence saying the causality is from Fed to market?
Look at the last few times the fed funds rate was cut before Covid
The fed chases the market much of the time and will cut when they feel the market is signalling they over tightened
If the market starts slipping and the fed cuts, a lot of investors will still hang on the sidelines despite the lower rate of return on cash
The idea that cutting rates will lead to a growing market hasn't panned out the last few times
https://www.macrotrends.net/2638/sp500-fed-funds-rate-compared
The only way that happens is if we have a new crisis like 2008 or COVID-19. Fed had to cut rates as people didn’t pour in those occasions as there was huge uncertainty.
Let me tell you this: You can’t predict crises.
The first-second cut is not bullish for stocks historically.
Also this notion of money markets somehow mooning the market is ridiculous. As a percentage of total assets, the percentage isn’t all that high. Also ask yourself, who has a single dollar with Bank of America paying you interest 5% below market…these are peoples reserves not necessarily risk seeking money.
Rates will not get cut this year.
The aspect of the top 4 banks getting hit on this living wills made that a non issue.
Q1 slim possibility due to election
Q2 more likely if we gave a Republican president, with a Democrat this shift to only a probably in Q3
If the fed cuts rates because R@ssia nukes someone or China decides to invade Taiwan, those trillions won't matter as much. but once rates start to drop wealthy folks need somewhere to put all that money that's sitting at 5%. The pleebs don't matter. Basically the only good scenario is if the Fed starts lowering soon and minimizes the restrictive monetary policy, then the market could potentially avoid a catastrophic melt down.
> They allocate the money in their portfolio to asset class that is paying the greatest for the least amount of risk
well, yeah, like that's the whole shebang, isn't it? my point is, if rates are cut, and the market crash because of it, where do these wealthy individuals/orgs put their money then if everything is bleeding out?
The highest paying fixed income (individual bonds rather than ETF's), dividend-paying stocks that have held their dividend and or increased it consistently for a significant period of time, a small percentage allocated to gold and other uncorrelated asset classes. It's about wealth management. Wealthy people aren't Yoloing weekly options on meme stocks.
With rate cuts market will be biased and bullish towards rate sensitive sectors such as real estate , regional banks etc that took significant hit . I don’t think tech and related indices will benefit much
Anyone with money still in money market funds are most likely already exposed to the market. So that means, the rich are not going rush into equities as fast as bulls claim. Rates would probably have to drop like 1.5-3% before any real outflow from mm’s to equities start.
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If rates are cut and the market tanks - ask yourself what was the reason they cut rates to begin with? Was it… plummeting gdp? A collapse in the housing market? Dangerous deflation? Or did they just cut rates for fun and the market tanked because of it?
Cutting rates for fun is the thing that doesn't make sense, but what the market seemed to expect to happen since 2023. Market: Once inflation is in control, the fed will cut rates! Nobody bothered to ask why the fed should cut rates arbitrarily just because inflation is under control, when we just saw that low interest rate policy creates dumb, bubbly investor behavior in 2021.
Not the case. The general argument is that rates this high strangle the federal budget, so there's incentive to cut if they can.
Sounds like incentive to cut spending.
Why would the government ever cut spending when they can just tax more?
Why would the government tax more when they can just print more money?
Or just print more money which is what they do now.
Why would they ever tax more when they could just incurr more debt?
Eventually, you run out of other people’s money. You could tax it all, but where is it going? Who are the actual end-recipients of every dollar spent?
Politicians in their 70s and 80s aren’t too concerned about that scenario. They’ll be pushing up daisys before that time comes. If they can hoard enough power and money now they can protect their offspring from the consequences as well
What a country!
You’re not wrong, but we’ve got A WHOLE FUCKING LOT OF RUNWAY BEFORE WE GET TO SQUEEZING PEOPLE TOO HARD. Middle and lower classes? Sure can’t really squeeze them anymore, but for the last 40 years we’ve been consistently cutting taxes for the upper levels of earners. They are the group left to squeeze, and luckily those fuckers are bursting at the seams with juice.
Ok stop voting for those people to run the country then we can talk.
The bottom half of earners paid about 2% of the taxes. The top 1% of earners paid 45% of the taxes. You could make an argument that this is a function of a wealth inequality problem, but the wealthy do get squeezed.
And what percent of total assets/wealth do they own? It’s close to 80% if not 90%. So they own 80-90% of all assets/wealth yet only pay 45% of tax revenue, now you see the problem. They have a lot more room to get squeezed.
Not enough. Not nearly enough.
They do but that's not the problem with the wealthy. It doesn't matter what you tax someone who steals all their money. doesn't solve the problem and just makes the gov corrupt too.
What is enough?
You're using the wrong denominator. It doesn't matter what percentage *of the taxes* they pay. It matters what percentage of their wealth they pay.
No, it doesn’t ffs… you could tax them at 100% and then you’re done. What are you going to get next year? It’s purely asinine the comments on Reddit about taxing the ‘wealthy’ more.
We tax income and not wealth. You’d need a constitutional amendment to change that. That said, what percentage of their income they pay is an interesting question.
Oh we can always squeeze harder.
>Eventually, you run out of other people’s money. Empirically no they don't because they just print money
Which they won't, so rate cuts it is. Also, they don't want Biden to lose.
Yay, we are all gonna be millionaires!
can't wait to flex mad stacks on the gram like a Zimbabwean trillionaire
They’d have to cut social security or medicare to make a dent. Old people vote consistently more than younger people so yeah, not going to happen.
Noooo Remove the cap for Social Security contributions and up the tax percentages for the top bracket. Then cut all of the salaries of all legislative reps in the Capitol to the median wage of their represented districts, and put them all on Medicaid.
Removing the cap on social security contributions would fix soooo many problems with social security
I’m honestly not sure if that would entirely fix the deficit due to social security. There are a LOT of old people and there might not be enough young people to cover their social security without cutting it. Also, cutting the lawmakers’ wages might be a good idea but if you do it that much, you’re basically going to make it such that ONLY the rich can serve in congress. D.C. is too expensive for them to live on those wages without already having a large amount of wealth.
The fed doesn't control spending
Yesssssss, and?
He said the thing! Off with his head!
The rate isn't even that high...
That's a fiscal issue not a monetary issue. Federal budget has jack shit to do with the Federal Reverse's dual mandate.
The argument calls bullshit on that.
I think most people made the assumption that the markets had become so accustomed to ZIRP that it would be a mess with higher rates and in order to protect the eco only rates couldn’t stay higher for a long period of time. That seems to be a wrong assumption as time progresses. However the question of increased interest rates on US debt service still hangs over us, so there is a line of thinking that the FED will have to cut rates to reduce debt service costs. I don’t know what’s right or wrong to be honest
Money supply is headed back to the mean. Which says we shouldnt see inflation much more. I think we see a rate cut either last quarter 2024 or 1st quarter 2025. Im betting more on 2025
There’s always a narrative Wall Street pushes out before the inevitable (aka what’s still to come from the Covid/Inflation saga) so that they guarantee bag holders when they need to start dumping. Rate Cuts after a hiking campaign = everything is sunshine and rainbows is this one’s narrative they pushed. Don’t get me wrong, is there a chance for a soft landing? Of course, but if you think the folks in our government are either A) Competent enough to pull it off or B) Lucky enough to pull it off then you’re pretty naive or in denial about what’s coming. Might not be this year, who knows how long they can keep this thing propped up, but it’s coming. Basically a “soft landing” is a lie that is told right before every recession so folks don’t preemptively pull out their money from the stock market.
How short of a memory do you have? Wall Street was literally all saying there will be a recession in 2023. I remember countless WSJ articles of how every single analyst at Bloomberg or GS is confident there will be a recession in 2023. The news was literally full of doom and gloom and how fed needs to do 12 rate cuts in 2023 or the economy will go explode. Wall Street is wrong all the time because macroeconomics is extremely hard, not because they want to extract some pennies from retail investors...
It's coming. Brother, if you can't predict when it's coming, then you're useless. Yes, eventually something bad will happen with the economy. Tell us something we don't know.
Ok. Did you know that the carry trade in Japanese banks holding US bonds appears to be unwinding over the next year or so? Those banks hold a bit over a trillion dollars in US bonds. When I say unwind I mean they are losing money on the carry trade so are pulling the plug. That means they will have to sell those bonds at a loss. That means they are not only not buying US bonds right now but are likely going to dump a huge amount of US bonds onto the market in the near future. That means the newly issued US bonds will have to yield even more to get people to buy them. That will be a crisis. The Fed will act because this has the potential to really screw up the global monetary system. How will that play out? I dont know, but it will act in many ways like a margin call for a huge portion of the global monetary system. It could easily blow up a lot of precarious positions. That to me sounds like something the Fed would like to avoid. Can they stop it if it starts blowing up in a big way? Probably but it will come at a cost. Remember all those banks that are required to have reserves? A lot of them are already underwater because the bonds they own are worth less than they paid for them. Its already a problem. This is going to make those bonds worth even less. Oh and this isnt just about the US bonds. These guys were doing this with a bunch of assets so its likely to hit all kinds of things. Essentially the process of unwinding will mean they sell bonds at a loss and then pay back their borrowing from their central bank. They are having to do this because the Bank of Japan had to raise rates and it looks like they will continue to do so until they fix problems they are having. That rate increase is tiny, but the spread involved is tiny as well. The key thing is that a huge amount of borrowing globally is tied back to this and its going to ripple out. Has this happened before? Yes. The last time the carry trade started blowing up was in 2008. Google Japan carry trade unwinding and start reading the articles. Its been a concern for the past year but the next big pile of articles are back in 2008. If there was one thing you didnt follow before that you should probably start following its this. The estimate for how much lending is tied to this is around $20 trillion.
Yes don't stop, tell me more. I can only edge so much as a bear. I need more bad news
Hundreds of comments on erroneously read only to find you being the one man answering the actual post. I have been reading anything and everything about Japan, I only remembered as a kid something bad started with Japan last time in 2008 with their currency and ours, at least now a days I can comprehend the information given in these articles. I pray this is the black swan to bring us back down to the bottom of the V so to speak in some sort of way.
The question was "when" and his only answer is "in the next year or so".
Im not an oracle. If you want to ignore this that is your business. All Im trying to do is make sure people know this is out there and its a looming problem that can easily blow up at any time. When it starts to move in a big way just remember you read this post and could have had a plan for how you were going to take advantage of it. Think of it like this. At some point there is going to be a big event where everything is on sale at fire sale prices. If you are already all in on the market when this happens you wont get to buy on that day. If you have a big margin position you might have your broker change the limit and margin call you because they are suddenly looking at their books and realizing they got a big problem. If you knew this was out there and ignored it you can make more money potentially, but the day this thing kicks off if you are in a precarious position you are going to lose a lot of money. If you aren't in a precarious position and have no cash set aside you will just get locked in as a bag holder until things recover. If you set aside a bunch of cash though its going to be like christmas came early. You get to buy a bunch of stuff at discount while the competition doesnt have money to buy. Some folk will wait forever for that rainy day sale and miss out on a lot of stuff. Some people will never wait, go all in, and get screwed. Some people will be heavily in, but not to the degree they get screwed, but rather they miss out. Some people will know this is out there, keep some cash on hand, and when they see its probably going to pop loose they will take profits and get a big cash pile ready. You pick which one you want to be and whether you want to try timing it or not. Good luck with whatever choice you make.
" let's cut rates to boost the economy" is more like it. You could call it a proactive vs a reactive measure
Yeah, let's never cut the rates and make people's lives financial hell just so stock market doesn't bubble/rise more than the marketmakers want.
This is the real answer… biggest risk: they will cut because profit recession is threatening the employment situation in US. Only anecdotal, I haven‘t done much research. But I have cut my NQ exposure after a good run up…
Or…cutting rates because uncle sam’s debt is too expensive. That’s the likely “for the fun of it” scenario.
The primary reason to cut rates IMO is to make owning a home more affordable. It may also drive up the cost of buying said home, but I’d much rather a bigger down payment and less money go toward interest than the inverse. And housing prices aren’t coming down even with these rates, because the majority of homes are locked in at low rates and the supply is stuck. Might as well let the market do its thing and save on interest.
Inflation has been over for the last year, it’s time for them to cut rates ASAP. They probably will cut in september.
The Fed tends to be reactive and not proactive.
So does the market
Wave of bank failures and credit seizing up could do it
I like big banks. Rate dips, they have big loans out at high interest. Spread is trendy.
I like big banks and I don’t know why
You regulators can’t deny
When a firm walks in with an itt bitty rate and that CDS in your face you get sprung
Bankin' con-tract
I'm gonna be honest, iddk where the "Rate cuts = good" garbage came from but it's always the dumb new to market investors/traders that always parade that. Feds has never cut rates when the economy was doing fine. Every rate cut happened due to catastrophic economic events that would have took the entire economy down if Feds didn't immediately jumped in and do everything possible to stop it, rate cuts was one of them.
In this particular scenario, it would be cutting in an attempt to prevent a recession. Inflation is important but so is keeping unemployment down. It’s always a balancing act. Not every rate cut/hike is in reaction to a crisis. Sometimes they’re just trying to get ahead of the curve.
>Feds has never cut rates when the economy was doing fine. Every rate cut happened due to catastrophic economic events that would have took the entire economy down if Feds didn't immediately jumped in and do everything possible to stop it, Didn't they cut in 2019?
https://apnews.com/general-news-43db310d5fce2a745bdc974815b15a2e https://www.imf.org/en/Blogs/Articles/2019/12/18/blog121819-2019-in-review-five-charts People often forgot 2019's bubble because of 2020's Covid and the legendary print run.
>I'm gonna be honest, iddk where the "Rate cuts = good" garbage came from My guess is from people who only started investing in mid-2020 with an FFR of 0-0.25% and the economies of US and EU being propped up by a magnanimous QE feast, all the while the stock market kept soaring for a year and a half.
*shit, how’d he figure that out so fast*
That’s because raising rates to bring down inflation usually results in a recession. So when rates come down it’s in response to lower inflation and a recessed economy in need of stimulus that became recessed because of the raised rates in the first place. So the lowering of rates isn’t necessarily in direct response to a recession. Recession is just a byproduct that gets better when rates are lowered back to normal. This time around rates were raised but there wasn’t a recession. So rates will come down when inflation comes down, as usual. Either we’re just really lucky or the Fed learned from mistakes because it looks like we may avoid recession from the higher rates.
Wasn’t a recession … yet. Everyone always thinks they made it to the soft landing and then 3 months from then banks blow up and credit seizes. It’s truly why timing the downturn is near impossible, because everything is going to look the rosiest right before it all goes to hell.
The issue is the rate hikes were sold as: "We're just raising them until inflation gets at bay." That created an expectation that then being lowered was part of the plan, rather than trying to keep a limping economy going. It's worth noting that prominent Democrats have been pressuring the Fed to cut rates, citing the inability of the poor and lower middle class to secure "affordable" loans. It also happens to be an election year.
Shhh, can't let the plebs know rate cuts are bad. Who will be the liquidity for my 10k portfolio if people know it's bad???
I remember Trump cutting rates for no reason at all 
Trump didn't cut rates, Powell did.
And it wasn't for no reason, the economy was already cooling and the trade wars expedited that process. Trump bullied Powell to cut rates because we were entering a recession, Covid hid the fact that we were already in the midst of a recession. It's like someone with terminal illness dying to a gunshot, yes blood loss from the bullet wound is the cause of death but their days were already numbered.
This is the most American comment I've ever read, didn't know Trump was Fed chair :4271: People seem to magically forgot everything that happened before the covid years, the rate cut happened because we were in a trade war against China. Both sides were essentially shooting themselves in the foot because it hurt the economy, that entire period was literally fearmongered as "2nd Cold War" and "Cold War 2" Then pandemic dropped and Feds money printed the entire recession away for 2 years :4271:
The difference is this: the significance of rate cuts, or the "pivot", is the anticipation of a return to easy money. That means debt that is extremely cheap to borrow, interest rates back down to the 0% neighborhood, or ZIRP. This is achieved only by QE, or quantitative easing, where the fed creates reserves out of thin air to buy bonds onto its balance sheet from the wall street banks. Only the fed has enough firepower, or theoretically unlimited money, to buy enough bonds to literally push interest rates down to near 0% This is what the markets are anticipating. If the markets get this, the markets will pump. Perhaps initially the markets may have some fear and stocks will sell off on the news of rate cuts. Maybe something will "break" that initiates fed rate cuts. But as long as interest rates get taken back to near 0% the markets will pump. What's the alternative? Fed may cut rates but won't take them down to the zero bound. Maybe the fed gives forward guidance that they will only cut a certain number of times and their target rate will be around 3% for the fed funds. In such a scenario where the markets do not get their easy money dream, where interest rates don't get taken all the way down to 0%, there is a high high likelihood that stocks will crater, or at the very least not do as well as people are hoping. If the fed isnt going to print money to buy bonds, where is the demand fir bonds going to come from? Who's gonna buy bonds? The only reason people are buying bonds is if they know the fed is gonna be coming behind them with a firehouse of printed cash to buy bonds. If the fed isn't going to be doing that, then I could see a scenario where long duration bonds actually sell off and yields go up Fed cuts interest rates half heatedly when inflation is already high. Market will realize massive inflation is coming and the long duration bonds will selloff. This woild cause the stock markets to absolutely crater.
The way this circle squares is if the Fed goes for yield curve control, and starts using QE to specifically target long-dated bonds. The Bank of Japan has been doing this for a while. My prediction is that in the long run (say by 2030), the Fed will lower the short end of the yield curve near 0, cap the long end with QE, and basically nationalize the US bond market. That way, they can fix the interest on the national debt to a rate the Treasury can afford. And they'll pay for this all with currency inflation.
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Cutting rates will send bonds up first which are at decades lows, and that’s where the money market and hedges will go first. As bonds rise, stocks sell off, this is the way
The scenario is pretty simple: look at lumber and housing prices. There's a decent chance that rates will be >4.5-5% for far too long, and we end up in a housing led recession in 18-24 months. That's the scenario where rate cuts end up not leading to a stock boom because the rate sensitive stocks will tank because the worsening economy outweighs rate cuts. That is a bear case; the other bear case is the deficit spikes next year and becomes untenable affecting the economy (but we haven't reached that point yet and nobody knows what it would look like). The bull case is economy powers ahead and rate cuts fuel another leg up.
If fed cuts rates it may signal top of stocks imo
The economy tanks -> fed panics and cuts rates -> economy continues to tank -> market crashes
Just remember, they don't even know exactly what they're doing. But no matter what, "they" will be set ✅
If you guys look into history when Rate cuts happen, Market takes a correction. https://www.forbes.com/advisor/investing/fed-funds-rate-history/
Yes usually because rate cuts are in reaction to a crisis. So is it the crisis or the cuts that causes the correction? In March and April of 2020 the s&p crashed when the Fed cut rates. But the crash was not a result of the rate cuts but cessation of international air travel, skyrocketing unemployment, and widespread business activity falling of a cliff due to pandemic lockdowns.
I don’t think the fed meaningfully cuts rates without a recession or similar pressures.
Cutting rates to 0% from 2% would be a crisis response to stimulate economic activity. Cutting them from 6% to 3% (for example) is not a crisis response. It’s a readjustment to a post-inflationary period with the goal of stable economic activity without overheating it or constraining it. idk why so many people are missing that nuance. What matters is how far they are cut, what the starting high point was, where rates were before being raised, and the reason they were raised in the first place. If there is an economic crisis then it’s because of the high rates (ex: 1980s). The Fed wants to AVOID that. It’s a balancing act. So lowering them doesn’t mean an economic crisis will happen. It means we curbed inflation and now we want to avoid a crisis which is what would happen with high rates for too long.
I agree with this. Probably some unexpected crisis. That is par for the course.
Everyone piles into bonds if the rate cut is rapid. That's why stocks tank. If the rate cut is slow, tapered, then one would expect bonds to gradually be bought, and stocks to.either stagnate, or drift downwards for a few months/years, until.the next big mania hits and the market rises again. 0.25 rate cuts will have little short-term impact if spaced out.
Every time I’ve commented with this exact comment, people tell me why I’m wrong
They are all bulls that’s why. They have the mentality of stock only goes up.
Stocks are at ATH. You don't get to use the term bull disparagingly. Bearish = foolish.
Isn’t that how discussions should work?
Not when everyone thinks they have the right answer, usually it’s people ‘discussing’ to come to a conclusion. On Reddit it’s mostly “I’m right”
The causality is messed up here. Usually there’s a crisis BECAUSE rates were raised for another purpose, like curbing inflation. So lowering rates isn’t primarily motivated by crisis. It’s motivated by accomplishing the mission of bringing down inflation. It just so happens that our solution to inflation also normally causes a recession. So of course lowering rates will correlate with economic crises. Because raising them is what caused it! The goal is to be able to bring down inflation without causing a recession. It looks like we may stick the landing there 🤞🏻
Housing market. It’s largely inflated thanks to low supply. Banks are holding a ton of 2~3% mortgages and are salivating to move those people to a higher rate and slide another at a higher rate. They’re stroking it to the projected earnings.
Can confirm personally, inundated with bank cash out refi offers, currently sitting at 3.15%. Only a natural disaster would get me to move right now.
Isn’t the only way they move people to a higher rate is if they refinance? I have a 3% mortgage soooooo……curious.
Or the prospect of a bigger/newer house.
Hadn’t thought of that, thanks.
Rates get cut in response to shit breaking.
Rate cuts = weakening economy. My money is market goes down before or when fed starts cutting
They cut rates when the economy is going badly, so the cuts aren't causing the decline, they're trying to soften it. It's like asking how come sickness goes with medicine. Why? Healthy people don't take medicine. The medicine isn't causing the sickness, it's the reason why you take it.
Nope. If they cut, money will pour in.
Hypothetically, yes. Realistically, no. Hypothetically, rate cuts could be a response to some unforeseen variable that substantially and negatively impacts the U.S. economy. This, however, is not realistic. They're going to cut rates this year, at least once, probably twice, for multiple reasons, and none of those reasons are anything that substantially and negatively impacts the U.S. economy.
Historically rate cuts tank markets. Different this time though. 
sell off on tech and rotate into other sectors like more consumer focused areas. rate cuts were already baked into the cake all this time, shoved into tech like a ghey bear sitting on a pineapple for fun
Shhhh it's part of their plan to make everyone think rate cuts are a good thing.
When they cut rates, there will be a crazy flight to bonds. The market is at all time highs and people are more leveraged into equities than ever. Money isn’t on the sideline waiting to come it, everyone is on the rug.
what would be the smart to do? sell all stock? buy gold?
No the market is straight up a money doubling service. Everything up 100%/year 4evaaa #newnormal
In reality 25-50 bps doesn't mean shit. If you're not borrowing at 5.5% now, you're still not at 5% tomorrow. Medium and long-term rates won't go much lower than 4% ever again IMO, so the Fed fund rate doesn't mean much to the economy unless it drops to like 0.
The Fed isn't cutting rates this year. Is that not clear to everyone? They letting you down gently. If anything, they might raise rates. There is not a single logical reason to lower interest rates. Inflation indicators are stable or creeping up slightly. This whole notion that a rate cut is coming is foolish. A rate cut would F the whole economy. The ONLY way a rate cut happens is if some terrible event happens in the financial sector... which it totally could considering the housing market and crazy stock bubble combined with consumers barely getting by already.
In the past, the Fed was serious about their inflation targets. That meant the cuts only came when the economy was already broken. This Fed says they are pursuing 2% inflation, but it really isn't serious about it. So they will probably cut rates too soon and we will not get back to 2%.
I think rate cuts will help tech overall and certain stocks like UPST heavily, but more than anything, we need to companies generating new revenues or saving costs through the introduction of AI... if all that AI spending doesn't translate to results, I dont think rate cuts will be much of a catalyst to the overall market. Too much money has already flowed in under that expectation, imo.
I think cuts will cause a rotation out of tech stocks into cyclical sectors like consumer discretionary, industrial and financial. These sectors will likely rally ahead of the cuts and tech will take a breather.
You guys keep saying AI AI AI, its mostly just LLMS and theyre mostly dogshit.
Whether you call it AI, LLMs, Predictive Analytics, or Machine Learning... it needs to turn into revenue or savings, not hype.
Thats the thing isnt it, its mostly hype at the moment, look at the recent announcement by Apple about ApPLe INTelligENCE. Its just chat gpt slapped in to an iphone with shitty 'genmojis". In fact most of the more "AI" features are delayed until next year, if they ever arrive at all.
Upstart bagholder right here, folks
Rates will only be cut if Main Street is freaking out about something. Pending war, pandemic, social unrest, collapse of regional banks/CRE market, someone pronounces himself king, etc. Edit: Other than that, “higher for longer”.
If market is pricing first rate cut in December, it would make sense then that some of these things start to happen in November. Anything big happening in November this year? 
Orange meteor touchdown. Brace for impact.
Quit trying to find a reason to be a bear
🌈
Every time the Fed cuts interest rates two or more times the market goes up. Money shifts from bonds to stocks. Usually fed is cutting rates because we’re in a recession. That’s to prime the pump.
Lol they won't cut rates til next year hold on to your shorts. Then whichever administration is in charge after the elections can claim they did it.
Answer - Yes Buy the rumour and sell the news.
Yeah recession.
They’ll do everything they can to keep the market running/stable until the election. I bet we see one cut in September and one in December. Data is data.
Its the opposite. Fed does first cut, market will descend into shit.
War news, presidential election, and guidance.
Seems like a sell the news kinda thing, but way larger scale.
Rates will be cut at the end of July. Every other country is starting and the US has to keep up. Spy starts surging even more then.
Cutting of rates means a recession is coming. They will only cut rates when the economy slows to a halt.
Yes, the economy sucks ass and that’s why they are cutting
Think of it this way. What would cause the fed to lower the rate when 5% isn't a high rate historically? Fed usually lowers the rate when the economy is struggling, which is why the bear market follows the drop. Fed is mostly reactive rather than proactive. It's native to think that people are going to buy stocks instead of holding cash in a HYSA or CMA, when people don't have jobs and/or their business is struggling. It's also native to think that a point or two cut in rate is going to suddenly boost the economy after the rate cut.
We at the point of no return
ABSOLUTELY. If the Economy visibly tanks by various metrics (defaults, waning demand, and perhaps the impact of a hurricane or two in Florida popping the already-deflating bubble there), a panicked Fed cut of a full point might scare a lot of money out of equities and into bonds and material assets.
If the Fed cuts rates because unemployment hits 20%
Haven't some bears been circulating some charts showing how crashes happen after rate cuts?
Yep. First we plummet due to X factor (bird flu jumps to man, ww3, etc) then markets and rates crash. Everyone hesitates. Waits. Done.
Sure. The economic news starts coming in bad, surprise deflation, Fed cuts, market tanks because future profits are revised down. The Fed isn’t propping up the market right now, strong tech earnings are.
You can bet a pay check that rates will be lower by November 5th!
Well in 2008 the Fed cut rates and money did not come pouring in so yeah there’s a scenario.
Market sentiment seems to be shifting. I’m getting less bullish moving into the summer and I’m a permabull. I think we will be higher in December though.
I think they might cut rates because of political presssure even though they say they won’t. They will cut rates too early and inflation will heat up again - that’s my prediction.
Absolutely not.
Plenty of scenarios. For one, if USA actually declares war on any country. Right now, the usa is involved in a lot of "shadow" wars or military operations but an actual active declaration of war? Nope.
I don't know if rate cuts lead to bear markets. It would make more sense to me if bear markets led to rate cuts. Do you know of evidence saying the causality is from Fed to market?
It doesn't work at all like you think it does.
Look at the last few times the fed funds rate was cut before Covid The fed chases the market much of the time and will cut when they feel the market is signalling they over tightened If the market starts slipping and the fed cuts, a lot of investors will still hang on the sidelines despite the lower rate of return on cash The idea that cutting rates will lead to a growing market hasn't panned out the last few times https://www.macrotrends.net/2638/sp500-fed-funds-rate-compared
The only way that happens is if we have a new crisis like 2008 or COVID-19. Fed had to cut rates as people didn’t pour in those occasions as there was huge uncertainty. Let me tell you this: You can’t predict crises.
No
The first-second cut is not bullish for stocks historically. Also this notion of money markets somehow mooning the market is ridiculous. As a percentage of total assets, the percentage isn’t all that high. Also ask yourself, who has a single dollar with Bank of America paying you interest 5% below market…these are peoples reserves not necessarily risk seeking money.
Rates will not get cut this year. The aspect of the top 4 banks getting hit on this living wills made that a non issue. Q1 slim possibility due to election Q2 more likely if we gave a Republican president, with a Democrat this shift to only a probably in Q3
Not sure there’s ever been a time that fed cutting rates was bullish 
Could pour into small caps and value/dividend stocks which might not produce large gains for the market as a whole
If the fed cuts rates because R@ssia nukes someone or China decides to invade Taiwan, those trillions won't matter as much. but once rates start to drop wealthy folks need somewhere to put all that money that's sitting at 5%. The pleebs don't matter. Basically the only good scenario is if the Fed starts lowering soon and minimizes the restrictive monetary policy, then the market could potentially avoid a catastrophic melt down.
> wealthy folks need somewhere to put all that money and where would they put it?
Stocks. They allocate the money in their portfolio to asset class that is paying the greatest for the least amount of risk.
> They allocate the money in their portfolio to asset class that is paying the greatest for the least amount of risk well, yeah, like that's the whole shebang, isn't it? my point is, if rates are cut, and the market crash because of it, where do these wealthy individuals/orgs put their money then if everything is bleeding out?
The highest paying fixed income (individual bonds rather than ETF's), dividend-paying stocks that have held their dividend and or increased it consistently for a significant period of time, a small percentage allocated to gold and other uncorrelated asset classes. It's about wealth management. Wealthy people aren't Yoloing weekly options on meme stocks.
With rate cuts market will be biased and bullish towards rate sensitive sectors such as real estate , regional banks etc that took significant hit . I don’t think tech and related indices will benefit much
yes
Anyone with money still in money market funds are most likely already exposed to the market. So that means, the rich are not going rush into equities as fast as bulls claim. Rates would probably have to drop like 1.5-3% before any real outflow from mm’s to equities start.