Small Predictions

Just a couple quick predictions over the next couple of days. The Fed is in the second day of a regularly-scheduled two-day meeting today, and is widely expected to make some additional rate adjustments. In this case, I'm predicting a quarter-point cut as a follow-up to their three-quarter-point cut last week.

My next prediction is that the stock market will drop after this cut, as a quarter-point cut will be seen as the Fed not doing enough to boost the economy and will be a sign that the board is concerned about inflation (I maintain, however, that if they were really concerned about inflation, they wouldn't have cut rates as much as they have).

If any of my predictions turn out to be wrong, I'll come back with an analysis.