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Next Wednesday, the FOMC will make its last announcement of 2025 The nearly universal consensus is that they will cut interest rates another quarter-point. As a chartist, I’m finding the interest rate market quite interesting since short-term rates seem poised to keep collapsing, yet the longer you go out, the more stubborn they appear to be. Here, for instance, is the one-month rate, which spiked massively higher for has been in a near free-fall lately.
Judging from the charts below, I’d say anyone anticipating a steady series of rate slashes for months to come is delusional. On the contrary, it looks like rates are about to push HIGHER, which should just thrill President Brainiac. We just have to get next Wednesday’s performative clip out of the way.
As noted last week, I am hearing all too much talk about a market crash to feel comfortable in a bearish view beyond the very short-term. Yes, the national debt (along with debts around the globe) is increasing with no end in sight. YouTube’s algo keeps feeding my TV video interviews of deep market thinkers talking about the coming crash. CNN even talked crash with 1929 author Andrew Sorkin. Ooh, scary!
It was October, after all, the most overrated, supposedly bearish month of the year. Well, nothing is foolproof, least of all market seasonals, but we are now in November, the traditional beginning of the supposedly bullish period that ends with “go away in May.”
The October crash talk is a “tell” that a crash is probably not imminent. Here is another. While I take issue with minor elements of CNN’s interpretation of the Fear/Greed index, you just don’t tend to get market crashes from all-time highs with sentiment readings like this. Market crashes tend to occur after enough bearish activity has already happened to drive mass sentiment to fearful.
(more…)I’ve long held that rates are heading much, much lower, and for a long time. Why? Because the economy is heading for a dumpster. And, as God intended, down they go…………
