If the Fed decides to keep rates steady tomorrow without dropping, then I expect a 3% drop.

Edit (I can’t change the title) - the Fed meeting is on Wednesday not tomorrow.

If there is an interest rate drop then we have bottomed and in for another bull run.

There is a prevailing theory, especially among the MAGA crowd, that Trump was playing 4D chess and tanking the market on purpose to get the Fed to drop rates, fulfilling a campaign promise and allowing Trump to refinance a large portion of the government debt at lower rates. I think most levelheaded investors don’t thing this is true. While I don’t agree with the hypothesis, we know that short-term moves in the market are generally not based on fundamentals.

I also think that if Powell (edited) doesn’t drop rates (which is the expectation) then the next social media post that Trump makes will be something along the lines of “Powell needs to be fired” and that will add more uncertainty to the market. If anything, we mostly like Powell because he’s been so transparent. Do we know what a Trump appointed Fed chair would do?

Edit - in case I wasn’t clear enough. I don’t think the Fed will drop rates. But I do think Trump will make a fuss about it and suggest firing Powell. And the toddler fit he will throw will tank the markets.

What do you think?