Stocks fell off a cliff yesterday after Jay Powell delivered an arguably hawkish rate cut. The market reacted particularly strongly to the revised outlook for 2025 wherein the number of rate cuts was reduced from four to two.
ES tumbled through our initial downside target at the 50-day moving average and is only just now hovering right below it.
The market finally accepted what we’ve been saying for months: inflation is not fixed, and in fact is on its way higher.
Wishful thinking has kept the market on the rise for over a year. It was further buoyed by post-election euphoria. All of that was unraveled by a 10Y which very conspicuously broke out of a falling channel.
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