Just as you can tell the health of your vehicle by the dashboard gauges, you can tell the health of the U.S. economy by looking at the fundamental "dashboard gauges". Take a look at the charts that track fundamental data releases below.
Click on the chart below to enlarge it.
What needs to be going down is going up and what needs to go up is going downward.
As you can see from the chart...unemployment is going up and inflation is going up (both bad). Industrial production, retail sales, the trade balance and consumer spending are going down (also bad).
Government spending is going up but isn't this always the case? ha-ha. So what's new there.
Anyway...you can see why there's a near term need for the Fed to cut rates in order to avoid a prolonged recession (because we're already in one). Today at 2:15pm EST (roughly)...you'll see the Fed announce its rate decision and any new comments. Pay close attention to any comments because it may hold some clues to where we go from here and where traders should position themselves.
Since a rate cut is already in the cards....the language from the Fed will be the focus. Also, if they cut rates by more than 3/4 of a point, then that will make a statement as well.
Get out your popcorn! It should be interesting.
Sean Hyman
Editor/Trader
www.money-trader.com
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