Recession pattern
We are 15 days away from the first Fed rate cut of this cycle.
Using that same time frame, I overlayed the following past rate cut cycles: 1981, 1990, 2000, and 2007.
These four cutting cycles matched the same data that we're seeing currently (unemployment rate curving up, 10y2y inversion, etc).
The sentiment from the Bulls is that rate cuts are suitable for the market. This is true...in the long run. History shows that the market pumps, on average, for 25 days after rate cuts, followed by an average of a 13-month sell-off.
Could we get one last pump around the cuts?
Will this time be different?
Anyone who tells you what exactly will happen is lying. Be open-minded, look at all the data, and use your best judgment.
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