Fed-Fueled Rally Update
The Fed giveth and the Fed taketh away.
The Fed has been giving a lot lately as it dialled back its aggressive rate cuts.
It has sparked either a new bull market or one of the greatest bear market rallies in history.
Either way, stocks are way up and it may be time to get ready to rebuild cash reserves.
Because absolutely nothing has changed about the Fed’s stance on rates.
Sure, there’s been lots of talk and quotes.
But the market’s expectations haven’t changed at all.
How can we tell?
The Fedwatch Tool from the CME Group shows all.
Here are the changes in probabilities of rate moves at specific meetings throughout the rest of the year:
Probability of quarter point rate increase at March Fed Meeting:
Last week: 85%
Probability of at least two quarter point rate increases by July meeting:
Last week: 29%
Probability of rate CUTS before December meeting:
Last week: 83%
The changes in Fed direction are practically nonexistent.
If you’re buying growth at a reasonable price, go ahead.
If you’re buying because of the Fed-fueled FOMO run, don’t.