Is the Fed Behind the Curve?

Powell and company now find themselves scrambling to catch up... [Shield] AN OXFORD CLUB PUBLICATION Loyal reader since April 2024 [Liberty Through Wealth]( [View in browser]( SPONSORED Rate Cut Set to Trigger Massive Gains WHERE??? Alex Green has a warning for anyone hoping for big gains after the Fed cuts rates: "Investors who are completely focused on the same investments as everyone else are making a huge mistake." Over the past 75 years, rate cuts have been shown to power a small group of overlooked stocks to extraordinary heights. ... with the best stocks having soared as much as 30X or even 40X during a rate cut year. [When Rates Drop] He calls them "Power Stocks." Yet, chances are, you haven't heard of them. At Alexander Green's Emergency State-of-the-Market Summit, he's going to change all of that. You'll discover who the biggest beneficiaries of the Fed's decision is set to be... and how you can play it. PLUS you'll hear a shocking prediction from Alex. [REGISTER HERE NOW.]( (Clicking the link registers you for a free subscription to Liberty Through Wealth, and offers from us and our affiliates that we think might interest you. You can unsubscribe at any time. [Privacy Policy.]( EDITOR'S NOTE Has the market gone mad? Or has it unintentionally created a once-in-a-generation opportunity? Senior Markets Expert Matt Benjamin of The Oxford Club weighs in below.... And on Wednesday, August 21st at 7 p.m. ET, Chief Investment Strategist Alexander Green will make a BOLD prediction and reveal how recent volatility has created an opportunity so massive... he's certain that some investors are about to see their biggest gains EVER. [Register for Free Here]( (Clicking the link above automatically registers you for Alexander Green's Emergency State-of-the-Market Summit, a free subscription to our e-letter Liberty Through Wealth, and offers from us and our affiliates that we think might interest you. You can unsubscribe at any time. [Privacy Policy.]( - Nicole Labra, Senior Managing Editor THE SHORTEST WAY TO A RICH LIFE [Is the Fed Behind the Curve?]( [Matt Benjamin, Senior Markets Expert, The Oxford Club]( [Matt Benjamin]( Is the Federal Reserve behind the curve? After the Fed embarked on its most aggressive rate hiking cycle ever - taking its target rate from near zero in March 2022 to 5.5% just 17 months later, and then holding it at that high level for more than a year - there are really just two questions on investors' minds at the moment... Will the Fed start cutting interest rates next month? And, if the Fed does start easing in September, will that be enough to prevent a rough landing for the economy? It's worth thinking about why the Fed raised rates so dramatically beginning in early 2022. There are different theories, but after speaking with Fed chairs for 30 years - I've met every Fed chief from "Tall Paul" Volcker, who ruled the central bank in 1980s, to current chair Jerome Powell - I think it's due to traumatic memories. The Fed had such a terrible time with runaway inflation in the 1970s and early 1980s that it has a "never again" kind of attitude toward rapidly rising prices. And it will do whatever it takes to battle them (even if that means pushing people out of jobs, and the economy into recession). Thus, the extreme rate hikes of 2022-2023. SPONSORED [Yours Free! Top FIVE Dividend Stocks Right Now]( Marc Lichtenfeld - income expert and author of Get Rich with Dividends - is giving away his Ultimate Dividend Package... completely free of charge! You'll discover... - An "A"-rated, ultra-safe dividend stock with a huge 8% yield - Three of Marc's favorite "Extreme Dividend" stocks, which could supercharge your income - And finally, Marc's No. 1 dividend stock for a LIFETIME of income. [Click here to get the names and ticker symbols now](... before the download link expires. **NO CREDIT CARD REQUIRED!** You can see in the chart below how the most recent hiking cycle played out compared to past ones... [Most Aggressive Ever]( In terms of steepness and suddenness, the other tightening cycles don't come close. Was it Too Much? For a few months early this year it seemed that the Fed might - just might - have stuck the landing (i.e., tamed inflation without causing a recession). Doing so is called a "soft landing," and it's the holy grail of central banking But suddenly, after the July employment report showed the labor market suddenly slowing much more than expected, and with the unemployment rate now a half percentage point higher than it was in March, it seems the Fed may have taken rates too high and left them there for too long. Instead of waiting until September to start cutting rates (as seems likely), it now appears the Fed should have started easing policy back in July, or even June. But hindsight is easy. And the current reality is that the Fed must scramble to adjust. As you can see in the chart below, the futures market now expects at least three quarter-point cuts by November - maybe even four (they would probably come as one half-point cut and a quarter-point cut, or two half-point cuts over the course of two meetings). [Many Cuts Now Expected]( That's a big change from just a few months ago, when most Fed watchers expected just one quarter-point cut from the Fed this year. And make no mistake about it, the Fed works very hard - through both public speeches and back-channel communications - to guide the futures market to the correct conclusion. The very last thing Powell wants is to surprise markets with an unexpected move on rates, up or down. We might even hear a rate cut commitment from Powell during his August 24 speech at the Jackson Hole Economic Symposium - which would most likely move markets. And that's likely how it will play out, with the Fed's target rate at least three-quarters of a percentage point lower by year end. Will it work? That is, will a few rate cuts before the end of the year be enough to keep the economy from falling into recession? It's too early to know, of course. The economy is massively complicated, and different parts of it - consumer and business spending, the stock and bond markets, the housing market, the dollar, etc. - will react in different ways to falling interest rates. But rest assured that we at The Oxford Club will be closely monitoring the Fed and its next moves. Rate cuts will bring opportunities in different sectors for investors. So stay tuned... Speaking of, Alexander Green is holding an [Emergency State-of-the-Market Summit]( to discuss what the Fed is going to do next - and how to potentially profit from it. It's being held virtually on [Wednesday, August 21st, at 7 p.m. ET](. [It's free to attend, but you must RSVP here.]( And, always, Invest wisely. Matt (Clicking any link in the article above automatically registers you for Alexander Green’s Emergency State-of-the-Market Summit, a free subscription to our e-letter Liberty Through Wealth, and offers from us and our affiliates that we think might interest you. 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