Powell’s About to Drop the Soap—And the Market’s Next

The market's frothing for rate cuts, but there's turbulence ahead. ͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­ Forwarded this email? [Subscribe here]() for more [Powell’s About to Drop the Soap—And the Market’s Next]( The market's frothing for rate cuts, but there's turbulence ahead. [Josh Belanger](joshbelanger) Aug 27 joshbelanger   [READ IN APP](   Let’s talk about Jerome Powell... The man with the soap in the shower, and things are about to get slippy. Wall Street has been on edge since March, foaming at the mouth for a rate cut. The big news last Friday was that Powell and his pals at the Fed decided “the time has come” for cuts, which they’re now signaling for September. But here’s the kicker—every time the Fed has had to cut rates in the past, it was because the economy was already sliding down a slippery slope. The real question now is whether the cuts will be fast enough to stop a crash, or if the plane’s already too close to the ground. Over the past ten months, we’ve witnessed a market that seems invincible—a continued melt-up led by the big names, especially Nvidia and the other members of the “Magnificent 7.” But if you look closer, you’ll see the cracks forming. Volatility is spiking and then cooling, only to spike again. Small caps are bouncing around like a yo-yo. These aren’t normal moves, and maybe why the Fed is getting nervous. The experts out there are already anointing Powell as the greatest Fed Chairman in history. They’re patting him on the back, saying, “Good job, Jerome!” But this feels a lot like celebrating a touchdown before the ball crosses the line. The game isn’t over yet, and the economy isn’t out of the woods. Remember, the Fed has never been ahead of the curve. When has the Fed ever predicted a recession before it happened? These are the same folks who told us inflation was “transitory” just two years ago. Now, they’re telling us that rate cuts will make everything better. But the transition is never as smooth as they want us to believe. So, what’s next? The market is going to get even more reactive to economic data than before. One bad headline, and we could see another knee-jerk reaction. Was the August sell-off because of the Yen “Carry Trade”? No, because the Yen is trading right near its recent highs. The real issue is the unusual blow-offs we’re seeing in the market. These moves are a sign that something isn’t right. Keep a close eye on Microsoft (MSFT). Selling in Congress has accelerated in this name since April. Even Nancy Pelosi sold up to $5 million worth of MSFT stock in late July. When insiders start selling like that, it’s a signal that something could be brewing. As we head into September, with rate cuts on the horizon and the market’s nerves fraying, it’s more important than ever to stay alert. Powell might think he’s got a grip on the soap, but one slip, and it could all come crashing down. Trade smart, Josh Belanger You’re currently a free subscriber. Upgrade for the full experience and receive exclusive special reports like "How to Get Rich in The Stock Market" and "Congress' Secret Stock Playbook: The Top 5 Power Picks Revealed”. [Upgrade to paid](   [Like]( [Comment]( [Restack](   © 2024 Josh Belanger 548 Market Street PMB 72296, San Francisco, CA 94104 [Unsubscribe]() [Get the app]( writing]()