Everyone’s buying into the illusion of growth, but the cracks are showing. The market sees the German economy in shambles, yet the DAX rises because traders anticipate QE. The same pattern is unfolding in the U.S.—the Bank of Canada is cutting, the Swiss are signaling negative rates, and the Fed is asleep at the wheel. Powell’s misstep yesterday could be the spark that sends rates and the dollar tumbling. The Atlanta Fed’s number might just be the wake-up call markets need, triggering a short-term shakeout. But when the inevitable Fed easing begins, expect an explosive rally, just like the DAX. Central banks never learn until the market forces their hand.
Everyone and their mother have been telling the growth story and pointing to the Atlanta Fed GDP Now. I have been screaming for some time now that growth will come down and we are in recession now. Powell and the FOMC gang made a huge mistake yesterday and now there is a long… pic.twitter.com/CldAvmHQLw
— Simon Says (@Seniorstrategen) January 30, 2025
People need to understand that historically you get a fake bounce in inflation just before things break apart. The last gasp is the direct result of people being afraid to lose their job because companies are seing declining revenue so they start saving. When that happens… pic.twitter.com/rAsriLP0I7
— Simon Says (@Seniorstrategen) January 30, 2025
And there it is: report from BLS today confirms what the early data from the PHL Fed indicated: private sector saw a net DECLINE of almost 200k jobs in Q2; that means the initial estimates overstated job growth by over 800k for a single quarter… https://t.co/b3HHhLc1ah pic.twitter.com/CgOLBbTMMp
— E.J. Antoni, Ph.D. (@RealEJAntoni) January 30, 2025
Powell yesterday confirmed that policy has moved from pre-emptive easing (cutting to prevent bad things happening in the future), to reactive easing (cutting when bad things happen). Put another way, Fed policy isnt a reason to be bullish stocks anymore
— Dario Perkins (@darioperkins) January 30, 2025
