The Fed Is Not Likely Cutting Rates Anytime Soon

Summary

• The Fed's prolonged high-rate policy is atypical, fueling debt risks and straining consumers as delinquencies rise in credit markets.
• Despite declining inflation, spreads between Fed funds and consumer rates are at historical highs, reflecting both bank risk aversion and decreasing demand for U.S. debt.
• The S&P 500 is technically overbought; momentum is weakening, and a 5% pullback to the 5,700 level is increasingly probable amid mounting uncertainties.
• I remain bullish long-term, viewing any near-term correction as a buying opportunity, and maintain my year-end SPX target at 6,500.
• This idea was discussed in more depth with members of my private investing community, The Financial Prophet. Learn More »

Jeremy Edwards

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

I am long a diversified portfolio.