VIXY - The Market Is Wrong With Its Rate Cuts Expectations

When the market falls in the trap of wishful thinking

History warns us about not confusing what is true versus what we wish to be true, as Ray Dalio identified in his book Principles. Yet wishful thinking - the attribution of reality to what one wants to believe - is one of the most common and deadliest cognitive biases investors commit in the market.

After the June 4th Chicago conference by the Fed, traders priced in a 70% chance of rate cut in the July 31 meeting and three cuts in total this year.