Has the Business Cycle Trapped the Fed and the Bulls?

Has the Business Cycle Trapped the Fed and the Bulls? The US Federal Reserve’s first interest rate cut in 10 years sent risk assets pummelling as many global equity markets fell 3% or more. Despite all the central bank interventions, the business cycle is alive and well.  TRI believes the down leg of the business cycle is well underway, where the weakening global economy triggers cascading declines in output, employment, income and sales. Ultimately leading to re-pricing of risk assets lower while sovereign debt becomes a safe-haven play.  The US or shall we say global trade war is creating additional economic headwinds. TRI’s June 2019 scenario of a bear and then bull traps for investors is playing out well. The bear trap beat the bears up pretty good, as the S&P500 rallied over 10% out of the June daily and weekly cycle lows. Now the setup appears to be complete for bull trap, right as the Fed’s cut interest rates.  The Fed now appears to be trapped as well, as its credibility is in question, and lower interest rates are on the horizon. As of August 2, the S&P 500 is on a bearish daily and weekly cycle trend. This…

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