This podcast episode explores the significance of rate cuts and hikes in the market cycle, particularly in the context of the recent return of yield to the bond market. The speakers argue that the Fed's aggressive rate hiking cycle in 2022 has permanently shifted the inflation landscape, making it a more critical factor in monetary policy decisions. The Fed closely monitors key economic data, such as initial claims for unemployment insurance and the Coors Supercore inflation measure, to guide its interest rate decisions. In examining the potential impact of rate cuts, the speakers distinguish between panic-driven cuts (which occur in response to economic distress and herald recession) and victory lap cuts (which follow successful economic management and can boost the stock market).
