T/A ETF AND INDEX

[POKERSAM]

Some thoughts on the Fed.
The Fed fights two problems.

1. depression - They stave off depression by lowering interest rates. They do this when the economy is threatened. When the economy is threatened the markets fall.
2. run away inflation - They slow inflation by raising interest rates. It slows the growth and helps to slow inflation.

When the Fed stopped raising interest rates it was a clear signal that they feared recession more than inflation. They felt the economy and the markets were topping and would roll over. They had raised rates throughout the bull market to slow inflation. Now it is time to fight the other problem, depression.

Now the Fed has begun another round of lowering interest to slow the decline and keep it from becoming a depression.

The Fed is a great tell on the economy and markets. They lower rates in a decline and they raise rates in an advance.

At this point they are more worried about a depression than inflation. So they are lowering rates. The Fed is not a group of stupid men who have no idea what they are doing. They know they cannot stop a recession but they can help slow the decline and help prevent a depression.

My advice is to follow the Fed as they follow the economy and the markets which reflect it.

I predict rates will return to 1%. Every rate cut tells us that the Fed sees continued decline in the economy and the markets.

This is not rocket science.