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Strategies & Market Trends : Ted Warren's Investolator

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To: WEagle who wrote (1685)4/6/2025 11:14:19 PM
From: Harvey Specter   of 1789
 
Another thing to consider is the Fed's potential future reaction. I think even though Jerome Powell is saying they're in wait and see mode now, there will be a breaking point (if the market continues to drop significantly) where the Fed steps in and pumps liquidity into the market via QE as they have done in the past. Most people, including the Fed, think the tariffs will lead to inflation but instead we are seeing the exact opposite effect now with most commodity prices dropping like a rock (along with stocks) because of recession fears.

Eventually this deflation will show up in the data if this continues and the Fed will become more dovish as their long-term inflation target is 2% and if the inflation rate becomes negative (deflation) then they will attempt to pump the market and prices back up via QE.
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