..a rate cut when we get a soft landing could be bullish, while a rate cut that is a precursor to a recession is not and is bearish.
..Brett has provided the data below. You decide.
..the real problem is if you are inclined towards the latter (recession) but your action is opposite of your inclination.
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I've received countless comments and requests to compare 2024 to 1995 and 1998. These are the years when the Fed cut rates and the stock market continued to rally.
Using the same economic charts as I did for 2007...let's dive in. (Data to showcase 24-month trend prior)
Fed's First Rate Cut:
July 6, 1995 (three. 6% down to 5.25%)
Sept 29, 1998 (three 5.5% down 4.75%)
Sept 18, 2024 (Probabilities between 7-10 cuts, from 5.25% down to 3%)
Unemployment Rate
1995: 5.7 (Down from 6.9)
1998: 4.57 (Down from 5.19)
2024: 4.2 (Up from 3.49)
US Inflation Rate YoY
1995: 2.9% (unchanged)
1998: 1.5% (Down from 3%)
2024: 2.5% (Down from 3.35%)
US Housing Starts:
1995: 1.46m (Up from 1.25m)
1998: 1.59m (Up from 1.46m)
2024: 1.29m (Down from 1.48m)
US Leading Economic Activity (Trending up is healthy)
1995: 79.06 (Up from 69.75)
1998: 88.14 (Up from 80.6)
2024: 100.4 (Down from 113)
US Existing Home Sales
1995: 4m (Up from 3.83m)
1998: 4.98m (Up from 4.13)
2024: 3.95m (Down from 4.7m)
