So according to Yahoo Finance, the Federal Reserve in 2024 is expected to cut interest rates a total of six times. Now what exactly does this mean for the overall stock market? So let me go ahead and start sharing my screen so you guys can see exactly what it is that I'm looking at. Yahoo Finance article says the Federal Reserve will cut interest ratees six times in 2024 as the economy shows clear signs of cooling down. So the really interesting thing about this article is that it pretty much says that um, there is an expect ation right according um to one of this Market analysts because of how the job market is cooling down that they believe.

So it says night Lee says that he expects the Federal Reserve will start cutting rates interest rates in the second quarter of next year, which is 2024, delivering as many as six quarter basis points, cuts a total of 150 basis points. He also said that he expects interest rates to cut down and extend into 2025 with at least 425 BAS basis points interest rate Cuts Meanwhile, Futures Markets U suggest that the Federal Reserve will cut rates by 125 basis points. So again, this is just an analyst saying this. Uh, but the thing that I find really interesting about this is a lot of people are talking about that in early 2024.

As second, as early as the second quarter that the Federal Reserve can begin to cut rates I wanted to show you what happens when the Federal Reserve based off of History begins to cut rates. But even before we get into this I wanted to show you one of these articles that says pal pushes back on rate cut bets but Market pushes back even harder so it says Wall Street Responded by doubling down on Friday as you guys saw the NASDAQ Market tried to recover even though despite Pal's warning sign that it would be premature to conclude with confidence that we have um, that we have achieved a sufficiently restrictive stance. So one of the things that you have to understand about Jerome Pal: So for those that don't know who Jerome Pal is: Jerome Pal is the head of the Federal Reserve who's in charge of this monetary policy. Every single month, the Federal Reserve comes together and they decide so on.

If I'm not mistaken, December 13th will be the next Fomc meeting. They will decide. Are we going to pause interest rates meaning not raise, not cut, just pause. Are we going to raise interest rates or are we going to cut interest rates So Based off of the previous three FC meetings, the Federal Reserve has decided to pause.

This hasn't been bad for the overall Market but it hasn't been necessarily good as interest rates haven't NE Neily dropped right. The thing that I found to be very interesting is that because of his tone, Jerome Po always puts himself in a position where it's open to whatever they want to do meeting by meeting. And this is something that he's said many many times is that the stock market always again, just like it always does. Uh, anticipates things prematurely.

So the Federal Reserve used to be very hawkish. This is why they were very aggressive with how they were raising interest rates, but now they're leaving themselves pretty much meeting by meeting and deciding then if they should be pausing, cutting or raising interest rates. The thing that I found to be really interesting is looking at the history. So the surprising thing that happens to the stock market when the FED cut rates.

So this shows that with the initial announcement that the Federal Reserve was going to be cutting interest rates, we saw a huge push and then shortly after into that day we began to see the market sell off. and then this really gets into I would say more detail. So I wanted to show you this a little bit closer and it says the S&P 500 which I would say is a good measure for overall market right. Just the general not NASDAQ not Dow Jones but just on average.

So the green so you can see right here the green dots are correspondent an increase of the federal fund rates. The red dots are correspondence to decrease in the federal fund rates and we can see that when we, um, when you see the actual red dots. that is when there's an active selloff based off of history. but it it doesn't do this every every single time.

So the one thing that I want to show you is obviously before 2020, we see green. We see red, The market still rallied. We see green markets still rally. We see red markets were still rallying.

Then in the 2000s, things got pretty interesting. so we could see green. So again, what that means is that they are at that point with with the Uh green itself is that they are raising interest rates right? So according to the Federal fund rates, greed stocks correspond to increase of the federal fund rates. So they're raising the federal fund rates.

So there we see the market begin to pull on back. But then during that we see that they begin to cut rates right. And during those cut rates. So all these red dots, then the Market's actively selling up.

Market's rallying. We're raising rates. Market Selling off. We're cutting rates.

So is there a correlation? Yes, to some degree. Uh, but I think I saw I it was Michael Bur right? Who is, uh, very famous for The Big Short Uh, He talked about that. There is an undeniable correlation between when the Federal Reserve based off of History begins to cut interest rates and the markets begin to crash. I Just wanted to show you that again.

It's not just that black and white. Obviously, if the market does begin to pull on back, it'd be really nice to look back at this data and be like, okay, you know there is a correlation there. and looking into the future, it's something that I'll take into consideration. but obviously nothing's going to be that black and white when it comes down to okay, they're going to be cutting interest rates early 2024.

This means that the market has to a crash I Mean when you when you're really thinking about it, um, it's supposed to just boost our economy because it really slowed down our economy in the process when the Federal Reserve was Raising interest rates as they made it more expensive for people like you and I and businesses to borrow money. So if you're asking that general question, well, what does cutting interest rates mean, it simply means that it's going to be more affordable to borrow money. Therefore, if it's more affordable the average person the average consumer businesses are more likely to then therefore spend more money, right? We should also see a correlation between mortgage rates beginning to drop and what do you think when mortgage rates begin to drop? Well, demand should naturally begin to increase to take out these mortgages. So therefore, naturally, we should see an increase in demand for these real estate, uh, properties as well.

especially if you've been seeing a Slowdown This is why you're most likely seeing a lot of your local real estate agents posting these screenshots because they're telling you or trying to encourage you. Hey, Now's the Time to try to buy so you can negotiate because if interest rates do begin to drop in 2024, therefore it's going to be a sellers market and it's going to be you're going to have less leverage to be able to negotiate because there's going to be more buying pressure. When there's more buying pressure, more buying demand. It just makes it I would say more challenging for a buyer to get a good deal because the seller has more options of a pool of larger buyers.

Very very simple. but again, it's going to be very interesting to follow up. I Just found that in uh, that article to be quite interesting. You guys can let me know down in the comment section what you think of that.

So again, we will be trading live tomorrow. If you guys want to tune on into to our live trading session, it's going to be the second link in the description down below. But I Also do want to remind you today is the final day for our BMW M4 giveaway and we're doing 20x entries. That means that tonight December 3rd at midnight is the cut off and if you don't enter, that means that this BMW M4 is going to someone else and not you.

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Take Care Team.