الأربعاء، 18 ديسمبر 2024

Why the Fed Will Struggle to Lower Rates Further in 2025 — and May Have to Hike

Join me at 9:15 a.m. ET for “Morning Monster”!
 
   
     
Why the Fed Will Struggle to Lower Rates Further in 2025 — and May Have to Hike
 
 
FOMC announcement is coming in HOT tomorrow at 2pm ET! Will it be 1/4 point cut as telegraphed or something else?

Come join me as we dive in and see what’s moving!

Plus, as always, we have stocks popping and dropping so come find out what is moving this morning as I look for stocks and do some live premarket analysis on SPX, SPY, NDX, QQQ, Russell, IWM and other stocks that are potential plays for the day. 

 
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Why the Fed Will Struggle to Lower Rates Further in 2025 — and May Have to Hike

The Fed has telegraphed a quarter-point rate cut this week so clearly that anything else would send the markets into a tailspin. Chair Jerome Powell and company have done well avoiding “OMG” moments lately — sticking to the script and keeping market reactions relatively contained. 

But beyond this expected cut, the road ahead for rates could get a lot more complicated.

Here’s the issue: The Fed doesn’t set the market rate. The market rate sets the Fed. If you’ve been tracking the two-year constant maturity yield — or DGS2, as it’s called on TradingView — you’ve probably noticed the Fed is constantly playing catch-up. 

They were slow to raise rates as the market surged, and now they’re signaling cuts just as the market’s starting to push back upward.

Look at it this way: If the Fed cuts rates again and the market yield rises — leaving them behind — it’s game over. That kind of disconnect could expose cracks that are already forming.

And there are cracks... 

Inflation, for one, has been quietly creeping back into the picture. Acyclical inflation — which doesn’t get much mainstream attention — has been rising for months. It’s already up nearly half a percentage point. 

If oil decides to catch a bid and drive prices higher, it could trickle down into everything, reigniting inflationary pressures the Fed claimed to have under control.

This makes any additional cuts a risky move. Cutting rates when inflation starts heating up again is like throwing gas on a fire — so they may have to hike.

Let’s not forget what’s waiting on the other side of this year. 

A new administration takes office in January, and we know cutting government spending is something Trump is focusing on. That could rip a limb off GDP, which has been propped up by government spending for quite some time now.

Think about it: Job openings have already fallen off a cliff, and historically, that leads to recessions. We saw two negative quarters of GDP back in 2022 — the technical definition of a recession.

If the Fed continues to cut and inflation rears its head, or if the market runs off without them, options get limited. Further cuts could create a scenario where they’re left with no ammunition while inflation burns hotter than they’d like.

This is where things get tricky for Powell. 

He’s stuck between two realities: the market expecting a smooth and steady path downward for rates, and the actual economic risks piling up. The first cut might go down easy, but beyond that — the Fed could be staring at a real problem in 2025.

So stay sharp. The road ahead isn’t as clean as a quarter-point cut this week makes it look. Watch inflation. Watch oil. And pay attention to what happens with those job numbers.

If the cracks widen, the Fed may find itself out of options — and out of time.

If you want to learn more about how I’m positioning myself for what’s likely to come, I’m hosting an emergency briefing at 11:15 a.m. ET today. 

Join the room here!


Today’s Daily Chart Setup: West Pharmaceutical Services (WST)  
 
 
This idea came directly from my Daily Chart Setup that automatically signals potential plays. 
 
WST is a new potential entry. Target: 360.0 Stop below: 298.36
 
WST has a historical win rate of 82.76%
 
WST has a profit factor of 1.247
 
WST trades last 50 trading days on average over 29 trades since 1972.
 
This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk. Always remember that past performance is not indicative of future results.

You can find full details on exactly how this works by scrolling down further in this newsletter. 

Now be sure to join me live at 9:15 a.m. ET for “Morning Monster,” my market-open livestream on YouTube!

 
 
‘Morning Monster’ Is Starting NOW!
I’m also live at 5 p.m. ET on Tuesdays for “30 Minutes of Awesome” — bring your ticker and I’ll analyze it in real time!

And be sure to hit that Subscribe button on my YouTube page!
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Hours Away From Powell’s Market-Shifting Announcement
 
 
In just a few hours, Fed Chair Jerome Powell steps up to the podium...

And based on what I'm seeing, his announcement could send shockwaves through the market.

As I’ve been saying, the same pattern that triggered every major market crash in recent history is flashing bright red.

 
 
So I’ll be LIVE at 11:15 a.m. ET today, Dec. 18, right before Powell's 2 p.m. announcement, to show you why I believe this could be his LAST rate cut before being forced to send rates higher.

You know what happened next in previous cycles...

I'll reveal… 

 
How I'm positioning my own portfolio before this announcement.
 
Several stocks I believe could make explosive moves this week.
 
The exact game plan I'm using to protect my wealth.

Tap here to get your room access before we start.

Remember: 11:15 AM ET sharp.

 
 
Enter the Room Here!
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How the Daily Chart Setup Works
 
 
Here’s a more detailed description of how the pattern triggers:
 
1. The price breaks upward through the orange Market Roadmap Line. 

2. Then the price goes up and down while staying above the line. Eventually, it comes down to touch the line again — this could take days, weeks or even months. 

3. Once it touches the line and starts moving back up, that signals an entry. 

I use Fibonacci levels for for profit targets and stop losses, and these two tools combined have helped me achieve a 77% win rate over the past six-plus years!

You can grab my Market Roadmap Indicator here for just $5 — less than a cup of coffee at most places!
Jeffry Turnmire
Jeffry Turnmire Trading

I host my “Morning Monster” livestream at 9:15 a.m. ET each weekday on YouTube, and then “30 Minutes of Awesome” at 5 p.m. ET each Tuesday!

Please check out my channel and hit that Subscribe button!

I’m just a regular dude in Knoxville, Tennessee: a husband, father, civil engineer, urban farmer, maker and trader.

I've been at this trading thing with real money for 20-plus years, and started paper trading over 35 years ago. I have a knack for making some epic predictions that just may very well come true. Why share them? Because I like helping other people — it's the Eagle Scout in me. 


*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk. 
   
 

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