No Rate Cuts Without Calamity

After the spike up in crude oil so far this week, let us also remember that winter is behind us and summer driving season ahead. 

UGA, the ETF for gasoline futures, has been quietly flagging on the monthly timeframe, seen below. If this flag uncoils higher say, above $70, as we see gas prices rise nationwide I have a hard time seeing even this Fed Chair cutting rates anytime soon. 

The endless dilemma for this market for a while now has been that bulls keep wanting to front-run rate cuts which they expect into either any market calamity or soft landing scenario, the former of which the bond market is predicting.

However, the iron is that the more equity bulls front-run rate cuts, the more likely it is we not only fail to see cuts, but also fail to see a pause, and may even get more aggressive hikes. 

Alongside housing, UGA may be right up there with crude itself as being one of the main drivers of inflation hitting consumers this spring. 

And oh, by the way, if it is true that OPEC slashed output because they actually see a deep global recession or depression the rate cuts will not be the panacea many immediately expect them to be, at least according to history.