We are getting closer to the Fed communicating a rate cut, and it's less about a failing economy and more about falling inflation. Lets dive in!

The macroeconomic conditions are moving closer to Macro Spring. Growth is slowly accelerating while inflation is decelerating. Liquidity is rising, and interest rates are easing.

Let's start with interest rates, considering it's likely the largest risk to markets!

Interest Rates

• Long-term rates are cooling from that scary 4.5% level, which is a good sign. Above 4.5% is a warning sign!
• Short-term rates set by the Federal Reserve are sitting right at 4.5%.
• Below 4.5% is Macro Spring - The golden scenario!

Lower rates, Higher Stocks

Liquidity

Global Liquidity continues to rise rapidly, expressed through Global M2 (money supply)

• Major economies outside of the US are printing money and lowering interest rates to stabilize their economies.
• The US Central Bank is not participating yet, but when they do, this would amplify the liquification process.

Economic Growth

As you can see, two of the most important growth indicators tell us that goods production and consumption are rising. Forget sentiment; this is the hard data!

Inflation

Inflation has never looked better! The Fed's preferred inflation measurements are plummeting: PCE 2.1% (blue) and Core PCE 2.5% (purple). Remember, the Fed's inflation target is 2%. We are close.

The Two Largest components to infation are falling, there's no chance Inflation re-accelerates!

Tariff drama is blinding investors from the tremendous fall in real inflation. Powell has always said he would cut before reaching the target, not at the target.

Tariffs will ultimately show that inflation is not returning, prompting them to increase their probability of cuts. A couple of slip-ups in the housing market and bam, you get a rate cut.

The genius Act will instill confidence in the bond market, helping long rates ease and ultimately re-stimulate the housing market. This may take 2, 3, or 5 months, but it's coming!

Fiscal Policy

The Genius Bill is Key to unlocking a monster summertime rally in crypto and stocks!

Passing this bill 👆🏾 creates the funding to pay for the Tax cut