A lot of people are talking about a soft landing and the Fed cutting interest rates. But you can't have both. Jason Williams explains why and what you can do to prepare for either outcome. A lot of people are talking about a soft landing and the Fed cutting interest rates. But you can't have both. Jason Williams explains why and what you can do to prepare for either outcome. Â Â
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 Jason Williams / Jan 30, 2023 Do You Want a Fed Pivot or a Soft Landing? Iâve been seeing a lot of misleading commentary out there on the internets these days⦠Financial influencers, or âfinfluencers,â are always out there giving terrible advice. But who can blame them? Most of them got their start less than three years ago. So it makes sense that they know absolutely nothing about finance or investing and give terrible advice. But youâre probably already pretty good at spotting their nonsense. You are a Wealth Daily subscriber. So Iâm not going to waste your time talking about their ridiculous calls to buy this or that meme stock. But what I am going to talk about is the apparent misunderstanding many people have of Fed policy decisions⦠Whatâs in a Word? Recently, as more and more âanalystsâ switch their predictions from recession to âsoft landing,â Iâve noticed that many of them donât seem to understand why the Federal Reserve does what it does. Why does the Fed raise interest rates? And why would it cut them? Iâll get to that, but first letâs have a lesson in vocabulary⦠Because many people also seem to misunderstand the definition of the word pivot. A pivot is a shaft or pin on which something turns. And when something turns around as if itâs on a shaft or a pin, it is said to have pivoted. So, to put that into context, if I am walking due north and I stop, turn, and start to walk in a different direction, I have pivoted. If I keep walking due north but slow my pace, I have not pivoted. If I stop walking entirely but keep facing due north, I also have not pivoted. And in the same way, if the Federal Reserve were to stop hiking rates and cut them, it would have pivoted. Slowing the pace of rate hikes is not a pivot. Stopping the rate hikes is also not a pivot. Only cutting rates would constitute a pivot in Fed policy. So, now that weâve got that out of the way, letâs talk about the reasons the Federal Reserve raises and lowers interest rates⦠New Robot Has Tech Execs Scrambling You might not believe this is even real, but I assure you this video has been left unedited. Nearly every tech company in the world is scrambling to get its hands on this tech. And investors are set to profit handsomely. Get the details on [our Top 3 Stocks Picks here.]( To Cut or Not to Cut? According to Investopedia, one of my [favorite free financial resources]( (after Wealth Daily, of course), the Federal Reserve and other central banks âcut interest rates when the economy slows down in order to reinvigorate economic activity and growth.â Conversely, central banks raise interest rates when the economy is hot and they need it to cool off to reduce inflation. Now that weâve cleared that up, letâs talk about the difference between a hard and soft landing for the economy. A soft landing does not include a recession. A hard landing does include a recession. Pretty simple so far, right? Good. Now, letâs think about what the Federal Reserve would do in a hard landing scenario, If a hard landing means a recession, and a recession means the economy is slowing, and the central banks cut interest rates when the economy slows, then a hard landing would lead to the Federal Reserve cutting interest rates. That would constitute a pivot in its current policy: from raising to lowering. Now, by the same reasoning, if a soft landing means no recession, and no recession means the economy is doing well, and central banks do not cut interest rates when the economy is doing well... Then a soft landing means the Federal Reserve will not be cutting interest rates. You Canât Have Both This brings me back to my original point⦠Right now the âanalystsâ on the interwebs and the televisions are telling you that weâre going to get a soft landing AND interest rate cuts⦠But you simply canât have both! You get rate cuts in a recession. But a soft landing does not lead to a recession. The Fed might not raise rates any higher, but if there is no recession, there is no reason to cut them. And if we do get rate cuts, thatâs because the Fed sees the economy slowing, unemployment rising, and a recession either ongoing or in the offing. The two things theyâre telling you are about to happen are mutually exclusive events. Rate cuts do not happen in soft landings. And soft landings do not necessitate rate cuts. Here Lies Silicon Valley, RIP If you thought the tech crash was bad... you havenât seen anything yet. Due to a massive shortage of one rare resource thatâs critical to their existence... Silicon Valley and the $5.2 trillion tech industry are facing a death sentence. And only one tiny company can save them from disappearing. [Read more about the $1 company ready to revive Big Tech.]( âJust When I Thought I Was Outâ Thereâs a scene in The Godfather Part III where Al Pacinoâs character Michael Corleone laments that just when he thinks he's getting out, they always pull him back in. [pull me back in] And thatâs what it looks like is happening in the stock market. Theyâre pulling us back in for one final hit. Theyâre trying to âwhackâ whatâs left of our savings by getting us to succumb to FOMO (the fear of missing out) and YOLO (you only live once â slang for betting it all on one investment) and putting our money back into a market on its last legs. And once they get us back in and get all that retail money off the sidelines, theyâll change their tune and explain what I just explained⦠If we get the soft landing theyâre all saying weâll have, then we wonât get those rate cuts the market needs to soar again. And if we are getting those rate cuts that will help the markets to soar again, then weâre going to get them after a landing so hard one might call it a crash. I donât want that to happen to you. Thatâs why Iâm taking this time today to make sure you understand exactly how this whole thing works... They could be right and we could get a soft landing after the Fed is done battling inflation. And they could be right that weâll get rate cuts later this year or early in 2024. But they cannot be right about both things at the same time. $6 Billion in Funding Going to a Single Company? Biden has been dishing out funding as if these are his last days on Earth. Heâs handed out more than $2 trillion in funding during his first few years in office. One of his biggest goals is to develop the future of energy. Shockingly, it has nothing to do with fossil fuels OR renewables. A full $6 billion is headed to an industry dominated by one tiny Virginia-based company. A few critical patent approvals means very few others are on the shortlist. And early investors in this game-changing technology could reap a massive windfall. [You need to immediately check this one out for yourself.]( Rate cuts in healthy economies do not happen. And unhealthy economies do not deliver soft landings. Itâs that old adage all over again⦠You canât have your cake AND eat it too. Youâve got to choose one or the other. Coming Soon to a Market Near You But donât worry. Whichever way it works out, weâll know soon enough. And whatever happens, my colleagues here at [Wealth Daily]( (and our sister sites [Energy and Capital]( and [Outsider Club]() and I will be here to help you navigate it and profit from it. If thereâs a Fed pivot, [youâll be the first to know when and where to invest](. If thereâs a soft landing, weâll help you find the kind of investments that flourish under higher interest rates. And if thereâs a recession or even a full-on crash landing, weâll be here to help you keep calm and invest on. [keep calm and invest on] Thatâs why weâre here, and Iâm pretty sure itâs why you are too. To your wealth, [jason-williams-signature-transparent] Jason Williams [[follow basic] @TheReal_JayDubs]( [[follow basic]Angel Research on Youtube]( After graduating Cum Laude in finance and economics, Jason designed and analyzed complex projects for the U.S. Army. He made the jump to the private sector as an investment banking analyst at Morgan Stanley, where he eventually led his own team responsible for billions of dollars in daily trading. Jason left Wall Street to found his own investment office and now shares the strategies he used and the network he built with you. Jason is the founder of [Main Street Ventures](, a pre-IPO investment newsletter; the founder of [Future Giants](, a nano cap investing service; the editor of [Alpha Profit Machine](, an algorithmic trading service designed specifically for retail investors; and authors [The Wealth Advisory]( income stock newsletter. He is also the managing editor of [Wealth Daily](. To learn more about Jason, [click here](. [Feedback? get in touch](mailto:/newsletter@wealthdaily.com?subject=Wealth%20Daily%20feedback) [Read this email online]( [Manage Newsletters]( [Share on Twitter]( You signed up for our newsletter with the email {EMAIL}.
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