[Altos Traders Weekly Edge] Fed Rate Cut...Details Inside

Sponsor Unlock Gold’s Hidden Potential: Forget Buy-and-Hold Want to maximize your retirement? Don’t just buy and hold gold at $2,300 per ounce. Instead, tap into little-known “Acceleration Cycles” for more profitable opportunities—even from small 1% price moves! Although I can’t guarantee results or against losses, you can discover exactly how these Acceleration Cycles work and how I plan to tap into them over and over again each month… [Learn how to profit from Gold’s cycles today!]( By clicking the link above you agree to periodic updates from ProsperityPub and its partners ([privacy policy]( Fed's Big Dilemma: Powell Stuck in a Lose-Lose Situation Weekly Market Overview Hi Traders, As we approach the highly anticipated Federal Reserve policy decision on Wednesday, the spotlight is on Jerome Powell and his team as they face a critical challenge. Investors are eagerly expecting a rate cut, but the Fed is likely to proceed cautiously with a 25 basis point (bps) reduction rather than a more aggressive 50bps cut. Cutting rates too aggressively could risk overheating an economy that, while showing some resilience, is still vulnerable to inflationary pressures. But with markets already pricing in as much as 100bps of cuts by year-end, the Fed’s measured approach may not be enough to satisfy investors, setting up a lose-lose scenario for Powell. What Happens With a 25bps Cut? While a 25bps rate cut may seem prudent, it could leave markets underwhelmed. With the S&P 500 hovering near record highs, expectations for a bolder move have been building. A modest cut could signal reluctance on the Fed’s part to take more drastic measures to support the economy, potentially triggering a selloff as disappointed investors react to the lack of aggressive action. In this scenario, the U.S. dollar could regain strength, Treasury yields might rise, and gold prices could fall, as markets adjust to a Fed that appears cautious rather than bold. What About a 50bps Cut? On the other hand, a 50bps rate cut, while pleasing to some investors in the short term, could spark fresh concerns about the economy's health. A more aggressive move might signal that the Fed is more worried about economic conditions than previously thought, causing panic selling as investors question the stability of the recovery. A drastic rate cut also comes with the risk of reigniting inflationary pressures, undoing the Fed’s progress in fighting inflation. This scenario could lead to a sharp decline in both the stock market and the U.S. dollar, while gold could rally towards new highs. Navigating Powell's Tightrope No matter which path Powell chooses, there’s a significant risk of market turbulence. A 25bps cut might disappoint those hoping for more aggressive action, while a 50bps cut could stoke fears of economic instability. Powell’s challenge is to strike a balance between easing market concerns and maintaining economic stability. His post-meeting press conference will be critical, as investors look for clues on the Fed’s future rate-cutting trajectory. How Should Investors Prepare? Regardless of the Fed’s decision, volatility is likely to follow. Investors should focus on high-quality stocks with strong fundamentals that can weather any storm. Now is the time to identify resilient companies with robust financials and growth prospects, especially as market uncertainty looms. The Federal Reserve’s decision could shape market dynamics for the rest of 2024, and it’s more important than ever to stay prepared for potential volatility. - The Team at Altos Trading In the next article, as the Federal Reserve gears up for a widely expected rate cut, JPMorgan strategist Oksana Aronov warns that the strength of the U.S. economy may not justify such a move. Sponsor Here’s how to start a “Weekend Side Hustle” from your sofa Here’s how you can start your very own “[Weekend Side Hustle]( right from the comfort of your sofa! It doesn't matter if you have a multi-million dollar retirement account… Or if you’re just starting out with a few thousand. All you need is: - Standard Brokerage Account - Internet Connection - A Few Minutes To Set The Trade Before The Weekend! And that’s how you can kickstart your very own “Weekend Side Hustle!” Now that you know that… [Let me show you how I target extra income as early as THIS weekend!]( See you on the flipside, TBUZ By clicking the link above you agree to periodic updates from Diversified Trading Institute and its partners ([privacy policy]( Is a Fed Rate Cut Really Needed? JPMorgan Strategist Says No As the Federal Reserve prepares for its much-anticipated rate cut decision this week, traders are already pricing in a 100% chance of some form of reduction. However, according to JPMorgan strategist Oksana Aronov, the economy may not actually need a cut at all. Aronov, who leads market strategy for alternative fixed income at JPMorgan Asset Management, argues that the current economic landscape doesn’t justify easing monetary policy. "A rate cut is not necessarily warranted, given that we're not seeing broad-based weakening outside of a more reasonable labor market," Aronov stated. Why Aronov Believes Rate Cuts Aren’t Necessary Pointing to key indicators like historically low unemployment and steady retail sales, Aronov notes that the economy remains robust. The current unemployment rate of 4.3% is still well within the Fed’s target range of 5%, and recent increases in unemployment are viewed as a return to normalcy after years of unusually tight labor market conditions. Further supporting her stance, Aronov highlighted the strength in consumer spending. Despite concerns about a possible slowdown, retail sales surprised on the upside in August, with a 0.1% increase compared to expectations of a 0.2% decline. Strong earnings reports from retailers such as Walmart and Target further underscore the resilience of the consumer. "The economy is continuing to move forward. There’s no reason to panic," she reassured. Have Rates Been Too Restrictive? Aronov also questions the Fed’s view that interest rates have become too restrictive. She argues that the market had simply gotten too accustomed to the ultra-low rates that dominated the post-financial crisis and pandemic periods—an era of monetary policy that deviated sharply from historical norms. "That’s what 15 years of extraordinarily unorthodox monetary policy will do to a market," she explained. The Risks of a Rate Cut Most traders are expecting a 50 basis point cut, but Aronov warns that such a move could risk reaccelerating inflation. She also cautions that rate cuts won’t necessarily resolve the credit and bond market volatility, as borrowing costs will likely remain too high to ease many corporate balance sheets. In her view, the Fed should resist the urge to front-load aggressive cuts, as doing so could create longer-term challenges for the economy and financial markets. What Investors Should Watch As the Fed’s decision looms, Aronov’s comments serve as a reminder that rate cuts are not a cure-all. Investors should remain cautious and focus on the fundamentals of their portfolios rather than relying on potential monetary easing to solve market volatility. While most are eagerly awaiting the size of the cut, Aronov’s take is clear: the economy may not need one at all. Sponsor [New Customers earn 5.25% APY* (variable)]( Store your money with Cash Reserve, a high-yield account built for peace of mind. New customers earn 5.25% variable APY*—that’s 13x higher than the national savings rate. ** Plus, your money’s FDIC-insured up to $2M†at our program banks and no limits on withdrawals and transfers. **The national average savings account interest rate is reported by the FDIC (as of 5/15/23) as the average annual percentage yield (APY) for savings accounts with deposits under $100,000. [Sign Up Now!]( Disclaimer: The Altos Trading Alert Newsletter is published as an information service for subscribers, and it includes opinions as to buying, selling and holding various stocks and other securities. However, the publishers of the Altos Trading Alert Newsletter are not brokers or investment advisers, and do not provide investment advice or recommendations directed to any particular subscriber or in view of the particular circumstances of any particular person. Altos Trading, including its owner, does not participate in any trades issued through the alert services. Subscribers to Altos Trading or any other persons who buy, sell or hold securities should do so with caution and consult with a broker or investment adviser before doing so. Trading securities and options involves risk. Prior to buying or selling an option, an investor must receive a copy of Characteristics and Risks of Standardized Options. Investors need a broker to trade securities and options, and must meet suitability requirements. Past results are not necessarily indicative of future performance. Performance figures are based on actual recommendations. Due to the time critical nature of trading, brokerage fees, and the activity of other subscribers, there is no guarantee that subscribers will mirror the performance of the service. Performance numbers shown are based on trades subscribers could enter based on the trade alerts. Altos Trading, LLC assumes no responsibility for any losses incurred by any individual or entity as a result of trade alerts or strategies taught through courses or coaching services. 7154 W State Street Suite 169 Boise Idaho 83714 USA Disclaimer: The Altos Trading Alert Newsletter is published as an information service for subscribers, and it includes opinions as to buying, selling and holding various stocks and other securities. However, the publishers of the Altos Trading Alert Newsletter are not brokers or investment advisers, and do not provide investment advice or recommendations directed to any particular subscriber or in view of the particular circumstances of any particular person. Altos Trading, including its owner, does not participate in any trades issued through the alert services. Subscribers to Altos Trading or any other persons who buy, sell or hold securities should do so with caution and consult with a broker or investment adviser before doing so. Trading securities and options involves risk. Prior to buying or selling an option, an investor must receive a copy of Characteristics and Risks of Standardized Options. Investors need a broker to trade securities and options, and must meet suitability requirements. Past results are not necessarily indicative of future performance. Performance figures are based on actual recommendations. Due to the time critical nature of trading, brokerage fees, and the activity of other subscribers, there is no guarantee that subscribers will mirror the performance of the service. Performance numbers shown are based on trades subscribers could enter based on the trade alerts. Altos Trading, LLC assumes no responsibility for any losses incurred by any individual or entity as a result of trade alerts or strategies taught through courses or coaching services. 7154 W State Street Suite 169 Boise Idaho 83714 USA [Unsubscribe]( | [Change Subscriber Options](