But how quickly the tides have turned. Now, more than ever before, investors and economists are betting that the Fed will cut rates a few times before the year runs out. Traders see a 90% chance of a rate cut in July, and a 98% chance at the September meeting, according to Bloomberg's world interest rate probability.. After all, a Fed cut would lower corporate borrowing costs and prolong the accommodative environment that has fueled this bull market.
But some experts are worried that the market isn't adequately reflecting the reason why the Fed would cut interest rates in the first place: An economic slowdown triggered by"While we are projecting 75bp of rate cuts in the US over the next 12 months, we don't think that this will prevent a sharp slowdown in the economy," said John Higgins, the chief markets economist at Capital Economics, in a note on Friday.
Under these circumstances, Higgins and his team are of the view that expectations for earnings growth are too high. All in, they expect the stock market to fall 20% from here.Investing legend Stanley Druckenmiller reveals why the 'best economic predictor' has him worried about the next crisis — and breaks down where you should be putting your moneyThe US is set to impose a 5% tariff on all goods imported from Mexico beginning on Monday June 10.
could climb above 3,000 this summer before pulling back in the second half of the year. However, the biggest risk to this forecast is that"Trump opts to be 'Tariff Man' not 'Jobs President,' causing recession," he said in a recent note to clients.