“The Job’s Not Done on Inflation”

[“The Job’s Not Done on Inflation”](#) Then why are we cutting rates? Oh... because they've lost. Garrett {NAME} NOV 7 [Icon]([Icon]([Icon]([Icon]( Dear Fellow Expat: A grown man in charge of tackling inflation said that the job isn’t done on inflation… One more time for the people in the back. “The job’s not done on inflation,” said Federal Reserve Chairman Jerome Powell during the Thursday press conference. But we’re cutting interest rates anyway… The election has sucked all the oxygen out of Washington. This Fed meeting conference was dull. Dull. Dull. The few highlights? Jerome Powell’s glasses don’t fit his face. He wore a purple tie. His hair is more salt than pepper. And he could not justify this rate cut if his career depended on it. There’s only one REAL takeaway from today. The Fed will pump this economy by the second quarter of 2025. I see it. But most people do not. It’s coming. Don’t miss this buying opportunity. Garret is a Macro Bear Clown Two years ago, someone called me a[Macro Bear Clown](. They suggested that I was always bearish about the markets. Far from it. I followed liquidity cycles and ran the market into the ground in late 2022. But when there’s central banking support – and the macro picture is wide open – the world is your oyster. We came off the bottom of a liquidity cycle in October 2022. I retracted my bearish outlook in early 2023 – and went in the other direction. In March 2024, [I went UBER bullish](on the S&P 500 due to Janet Yellen’s meddling. I predicted a move to 6,000 for the S&P 500… and went long gold, silver, and Bitcoin. I didn’t do anything. I just read the tea leaves. Don’t be short because you’re being told to by people who don’t understand how money flows through the system. We’re 20 points away from 6,000… and have a way to go. This morning, I’ve raised my S&P 500 outlook for 2025 to 6,600. This has little to do with the economy. It largely comes down to the Fed. Ongoing weakness in the bond market is coming. We’re on a sugar high now because there’s an expectation that Trump will cut spending. But a lot of spending will be unlocked in the year ahead—and a lot of it is surprisingly still linked to COVID relief. So, spending will rise. And bond yields will rise. And the sugar high will abate. And the Fed will have to do what it doesn’t want to do. It must buy bonds at the front end of the curve to manipulate interest rates and drive down borrowing costs for the U.S. government. With Trump’s victory, the urgency rises. There have been two periods[in the post-1993 world]( where one party had a complete Sweep. Obama did it in 2008. Trump did it in 2016. What followed was a huge wave in fiscal spending and an urgency that came with those wins. And now… Trump has now done it again in 2024. There will be a groundswell in government spending and obviously they will pass the tax cuts. Good. People get to keep more of their money and the value of their time. But budget deficits will expand. There will be NO effort to contain costs in 2025. And I think the Fed is still squarely in charge of managing the situation… I expect that any short-term problems in the banking sector (likely in March or April) will require efforts by the central bank to start Quantitative Easing Round 6. That’s bullish for banks. We’ll talk about how to trade regional banks tomorrow. I like the idea of selling puts and spreads on Fifth Third Bank (FITB). I’ll explain that trade tomorrow. Stay long… And stay positive, Garrett {NAME} Secretary of “Long” [Icon]([Icon]([Icon]([Icon]( [Logo Image](#) Postcards from the Republic 1125 N. Charles St. Baltimore, MD 21202 This email was sent to you because you subscribed to this publication via FinPub. To stop receiving these emails from Postcards from the Republic, Please click [unsubscribe](. © 2024 Postcards from the Republic, All Rights Reserved. Any reproduction, copying, or distribution, in whole or in part, is prohibited without permission from the publisher. Financial Disclaimer: Nothing in this email should be considered personalized financial advice. Do not consider any communication between you and Postcards from the Republic and its employees or writers as financial advice. The communication in this email is for information and educational purposes only. Model portfolios are tracked to showcase a variety of academic, fundamental, and technical tools. Insight is provided to help readers gain knowledge and experience. All investments carry risk. Readers should not trade if they cannot handle a loss and should not trade more than they can afford to lose. Consider consulting with a professional before making investment decisions.