Rising Unemployment: A False Hope for Lower Interest Rates?

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by bitkogan

The uptick in unemployment to 3.8% fits nicely into this week’s trend of “bad news is good news.” While the rise is largely due to a revised participation rate, the key takeaway is that it represents yet another piece of negative news.

The market has been eagerly anticipating such developments, hoping they might trigger an interest rate cut.

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However, I’ve been pushing back all week, arguing that the market’s rate-cut hopes built on shaky economic news could prove empty. To truly sway the Federal Reserve into loosening its grip, a significant stock market drop might be needed. Therefore, I’d advise caution when considering long positions.

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