Why US Interest Rates are a Nothing Burger
Interest-Rates / US Interest Rates May 24, 2024 - 09:55 PM GMTBy: Nadeem_Walayat
All eyes today will be on the Fed and it's interest rate decision, weren't we supposed be having a cut in March? That's gone! Kicked down the road. So no rate cut today or at the next meeting nor likely in June. And each time the Fed holds the MSM clowns cry stocks must fall due to failure for rate cuts to materialise all whilst the bull market continues to relentlessly grind higher.
Everybody is obsessed with when will the rates be cut without understanding why rates should be cut!
Why should rates be cut?
Because CPI is falling? Or was falling.... Well that CPI is a LIE! CP LIE! A made up fake inflation index.
For rates to actually fall there needs to be a reason other than it will make life easier for home owners and speculators.
One major reason to drop rates would be if the Dollar was going up, is the Dollar going up?
Nope the US Dollar has been stuck in a trading range for the duration of this stocks bull market. The stock market likes a stable dollar. not a strong or weak dollar, a stable dollar. So why cut interest rates when the Dollar is stable and the markets like it that way. There is no reason in terms of dollar trend to cut interest rates,
Whilst the Fed barks about how inflation is now mostly under control by waving fake CPI lie in everyone's face. However INFLATION = ASSET PRICE INFLATION - That's stocks and housing which given their trends suggest that Interest rates should be HIGHER NOT LOWER!
What about to Create Jobs?
Does the US unemployment graph look like it warrants lower interest rates to create more jobs?
I could go on and on, but apart from clowns on the cartoon network banging their fists demanding lower rates NOW, there isn't any significant reason to lower rates. I mean if stocks are rocketing higher despite higher for longer then does that not tell you the MSM rates cuts are coming mantra is just another one of those nothing burgers such as the fact that a recession has always been imminent since early 2022.
So I think focusing on interest rates is a red herring as market price action is telling us that interest rates are TOO LOW! The clowns say interest rates need to be cut so that markets can become risk on once more, then what the hell do you call what Bitcoin has been doing if that is not a sign of MARKETS being RISK ON!
Where markets are concerned nothing is certain but the fact that the consensus is waiting for rate cuts to get the party started illustrates once more that the consensus is WRONG! The party has been underway for over a year with no end in sight as all those sat on the side lines desperately seek a big price dump so they can buy and will increasingly admit defeat and join the party while they can!
It is definitely impossible for ordinary investors to make money because the MSM clown journalists are always pointing them towards looking in the WRONG direction because they don't have a clue what to actually look at and thus everyone is staring at nothing burgers all whilst the markets rip higher! The next nothing burger will be another banking crisis!
UNDERSTAND INTEREST RATES ARE TOO LOW! IT'S MORE LIKELY AT SOME POINT THE FED WILL BE FORCED TO RAISE RATES NOT CUT RATES GIVEN ASSET PRICE INFLATION.
This article is an excerpt of my recent extensive analysis - Stock Market, Interest Rates, Crypto's and the Inflation Red Pill which was first made available to patrons who support my work. So for immediate first access to ALL of my analysis and trend forecasts then do consider becoming a Patron by supporting my work for just $7 per month, lock it in now at $7 before next rises to $10 per month for new sign-ups. https://www.patreon.com/Nadeem_Walayat.
Contents
Stock Market Trend Forecast
Swings Analysis
AI Stocks Portfolio
TESLA
Why US Interest Rates are a Nothing Burger
Stocks Bull Market Smoking Gun
Time to take the RED Pill
Crypto Correction
Bitcoin Trend Forecast
Bull Market Tops
Crypto's Exit Strategy
Coinbase MSTR 2.0
UK Tax Year End To do list
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By Nadeem Walayat
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Nadeem Walayat has over 30 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.
Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk
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