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Strategies & Market Trends : ajtj's Post-Lobotomy Market Charts and Thoughts

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From: ajtj999/26/2025 3:32:44 PM
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Sun Tzu

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Yardeni:

The upward revision in real GDP and the downward revision in employment suggest that productivity growth will be revised higher. The Fed lowered the FFR last week to revive demand, which doesn’t need reviving given the strength of real GDP growth during Q2 and Q3. The weakness in the labor market is likely structural, with several factors depressing the supply of workers, and AI possibly weakening the demand for entry-level employees.

The Fed’s easing is unlikely to fix the structural problems plaguing the labor market. Demand for goods and services doesn’t need to be stimulated, but by doing so, the Fed risks boosting inflation and bond yields, and increasing the risk of financial instability, including a possible meltup in the stock market followed by a meltdown.
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