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This Week’s Market Forecast… 📊

This Wednesday marks the start of a new chapter in monetary policy as the Federal Reserve prepares to cut rates for the first time since December. A 25 basis point cut is widely expected, but the real focus will be on the Fed’s messaging and whether this is the beginning of a broader easing cycle or just a one time adjustment.

For months Washington has pressured the Fed, arguing it is behind the curve. The White House’s dovish stance stems from stubbornly high mortgage rates, tightening credit for small and mid sized businesses, and a softening labor market.

I have maintained that the labor market is flashing warning signs and should be the Fed’s priority. As Neil Dutta has noted, “Unemployment can move in a non linear fashion while inflation tends to be a much slower moving process.”

The Fed’s hesitation has been rooted in tariff related inflation risks. But every inflation print has carried the same refrain from economists: “inflation is coming, just wait.” The same refrain we have heard for two years about recession. Neither has arrived in force, yet the labor market has quietly weakened while policymakers waited.

This week’s cut is a step in the right direction, but it will not immediately fix housing or jobs. The key is what comes next and whether the Fed signals more cuts at its final two meetings of the year or treads cautiously once again.

Have a great week!

Top ETFs on our Radar… 📈

The iShares Expanded Tech-Software Sector ETF has performed exceptionally well this year. Software companies have shown strong performance as investors seek to identify the next big winner in AI.

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Thanks for reading and have a great week!

-Ryan

@Theinvestingauthority