Market Timing Brief™ – Updated 04-25-2025 “Is This US Stock Market Bounce Going to Fail Right Here or Keep Going?”           – Main Post: “The Next US Stock Market Move. Gold Hesitates. Interest Rates Rule the Markets Once Again.”

Posted on January 20, 2025 by David Durand

Market Timing Brief for July 29, 2025:

“What the Fed Will Indicate On Rate Cuts Tomorrow”

The following will tell you how to position yourself on a market timing basis before the Fed meeting and what to expect from the bond market over the next several months, which impacts many stocks as you know…

Trump gave away the punch line following his Fed building tour with Chair #Powell. He said they were in agreement on rates in so many words. He said that to hint that Powell had agreed to cut rates “soon” IMO. Otherwise, what was the point of lowering his antagonism toward Powell. The beating would have continued. It didn’t except for the cost overruns on the Fed building project.

That means there are two possible outcomes to consider for tomorrow:

1. The Fed cut rates tomorrow and surprise a market that expects NO rate cut at a 96.9% likelihood or…

2. The Fed will indicate in some indirect way that a Sept. cut is “very possible” to “likely,” but not using those words as the Fed prefers to be more obtuse.

What They Will Do: Because the Fed does not like to surprise the market, it won’t cut rates tomorrow, but will signal a Sept. cut as in #2.

As a result, bonds and stocks will both rally further after the meeting. The bond impact will be greater at the short end of duration, so the 10-2 year spread will steepen.

Eventually with rising inflation into year end (with a dip for the Aug. report), the 10 Year Yield will rise, further steepening the yield curve.
That means that the 10 Year Treasury Yield, TNX can fall up to and then following the next CPI reading for days to weeks, but it will then rise into year end.

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