Nothing has changed…

We are in a Real Bull Market. Powell doesn’t want to fuel a Boom and Bust like the bears are calling for. We are going to go slow and steady with the knowledge the Fed Funds rate is too high compared to market rates and there is room to cut if the data dictates that direction.

See this morning’s update of the chart we posted back on January 18:

The Fed Funds rate, which I call the Message rate, ie. the FED message of rate direction via the differential between it and the average market interest rate (2Y+5Y+10Y+30Y)/4. Here is a chart of that differential since 1989. It is obvious that at a minimum to get Fed Fund rate inline we need 4 cuts (yellow line) or to get to a normalization rate, 6 cuts (green line).