Expect Hints of Easing To Grow Much Louder

Here we go again. The Fed evidently has begun "conditioning" our "expectations" for a new season of quantitative easing. Fed Would Consider Interest-Rate Cuts if Growth Outlook Darkens is the headline atop a news story concerning a NYC panel discussion moderated by the central bank's vice-chairman. This is just what Wall Street and other promiscuous abusers of credit have been praying for lately, along with the Trumpster. We've come a long way policy-wise, baby! How many months ago was it that some Fed party pooper was dropping hints about another round or two of tightening in 2019?

The stock market's reaction was feeble, but only because DaBoyz are already pacing themselves to milk every inch of upside they can from the central bank's new spin. Perhaps this is what will push the S&P 500 index to 3095, a Hidden Pivot target of mine that has seemed a little farfetched. I still have my doubts it will be reached, but I'll stick with it unless my technical runes take a turn for the worse. In the weeks and months ahead, we'll surely be hearing plenty about how easing will re-invigorate the housing market. I am predicting otherwise, since this particular gas bag has already begun to deflate. But who knows? Perhaps Southern Californians who live in dumpy little, million-dollar Eichlers will upgrade? My forecast calls for 10-Year rates to decline to at least 2.11%from a current 2.22%. That may not be enough to launch stocks into the sort of parabola they achieved in Q1, but it'll probably hold stocks buoyant for a while.

Start a free two-week trial subscription by clicking here. Make the Trading Room and Coffee House your first stops. There you will meet veteran traders from around the world.