Alternative Path

[gdl]

LONGEST downturn for over 5 months! Shallow but anxiety has finally caught hold. We will be watching for economic strength and signs that both manufacturing and services are well above 50 (even). Since jobs are still very strong any continued strength in those economic areas and the likelihood of rate cuts anytime soon is out the window,

Dollar has broken out! Not yields yet.

Inflation is only one part of the equation for the FED to cut rates. They have to see enough weakness to JUSTIFY a cut. There isn't any yet. In fact, the current situation suggests the consumer is accepting current borrowing costs and even starting to accelerate their purchases.

It is obvious the FED wants to find an excuse to cut pre-election. If they do cut premature the result will be swift. A spike move causing INFLATION to take off.
I still expect mid to late JUNE to be one possible steep quick drop. I don't actually anticipate it then, but that window seems open.