QQQ - The Fed Preview: Hawkish Turn Straight Into The Recession

2024-06-07 14:21:40 ET

Summary

• The Fed is likely to signal less than 3 cuts in 2024, possibly no cuts at all, which is a hawkish turn and signals a "higher-until-recession" policy.
• The Fed is also likely to increase the projected unemployment rate and inflation figures for 2024.
• Given the "higher-until-recession" policy, the S&P 500 is facing a recessionary bear market, even though the pain trade is the uptrend continuation as the euphoria rages.

The June FOMC meeting

The FOMC is set to meet next week on Wednesday, and it was widely expected, not that long ago, that the Fed would start lowering interest rates at this June meeting. However, the Fed is not going to lower the Federal Funds rate next week. In fact, the Fed is likely to signal that it might not be able to lower the interest rates at all in 2024....

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