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VRA Letter: Fed Shocker. Dow Jones Hits ATH. We’re in the Sweet Spot. Fed Telegraphing Begins. Still Pounding the Table on Small Caps & Miners.

Good Thursday morning. VRA Quick Hitters this AM. 1) While we’ve been saying over the last month that “Fed front-running” was clearly underway and that it would cause rates to plummet, and while we wrote yesterday that it ...

Posted On December 14, 20235 MIN Read
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Good Thursday morning. VRA Quick Hitters this AM.

1) While we’ve been saying over the last month that “Fed front-running” was clearly underway and that it would cause rates to plummet, and while we wrote yesterday that it was time for the Fed and J Powell to start telegraphing their 2024 rate cuts to the markers, even we were surprised by the overwhelming dovishness the Fed exhibited yesterday. It was an absolute stunner. And its causing a stampede into stocks and bonds. That sound you here is $7 trillion exiting money market funds for the stock market.

Our advice to the Fed, From Yesterdays Letter:

2) Fed front-running is picking up speed. 

Just 13 days ago, at a speech to a think tank, J Powell said these exact words; “it’s not time to talk about rate cuts”. JP, what changed in less than 2 weeks?
Once Powell and team announced that they expected 3 rate cuts next year, followed by possibly the most dovish Fed meeting imaginable, the race to buy bonds and stocks was “o...

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