Last week, the Fed confirmed that it intends to cut rates three times this year, despite the fact inflation is NOT near its target of 2% and is in fact turning back up.
If you’re scratching your head on this, there’s a very simple answer:
It’s an election year. And the Powell Fed is stacked with political hacks.
It is clear that the Powell Fed is full committed to aiding the Biden administration in its re-election bid. After all, why else would the Fed talk about triggering an easing cycle when:
1) The stock market is at all-time highs.
2) Financial conditions are looser now than they were BEFORE the Fed starting raising rates in 2022.
3) The economy is growing, NOT slowing down.
4) Inflation is turning back up.
These are the sorts of conditions in which the Fed usually RAISES rates. Instead, the Fed is going to start cutting rates AND reducing the pace of its Quantitative Tightening (QT) program.
Both of those are HIGHLY inflationary.
In this context, it is clear the Fed has become a political entity. There is no credible economic/ financial reason for the Fed to commit to these policies. At the very least, the Fed should remove one rate cut from its forecast for 2024.
Instead, it is clear that the Fed is committed to pushing stocks and housing as high as possible going into the 2024 Presidential election. This will be a boon for Americans in the short-term, but the consequences will be devastating in the coming months as inflation eviscerates incomes and investment portfolios.
The good news is that those investors who are properly positioned for this stand to see extraordinary gains.
On that note, the FREE copies of our Special Investment Report detailing three investments that will profit from the next round of inflation are rapidly being reserved. So if you want reserve one, you better move fast!
To pick up your copy, go to:
https://phoenixcapitalmarketing.com/inflationstorm.html
Graham Summers
Chief Market Strategist
Phoenix Capital Research, MBA
