RE:RE:RE:DF NAV & dividendThe rate cuts, when they arrive, will most assuredly be in 1/4 pt increments. And the "last mile" down to 2% could actually take years. In fact, the FED has practically admitted that 2% may not be achieveable without a recession and that between 2-3% inflation is the new norm. If this is the case, then we are almost there which gives the FED the signal to start throttling back.
As far as prices coming down, I don't believe it will be noticeable as much as it was on the way up. This is because what we are seeing now is called disinflation, ie... a temporary slowing of price inflation which is acceptable. What we don't want is deflation which we briefly experienced during covid. This is the worst of all economic outcomes and thankfully we escaped it.
oldbrit34 wrote: Well said Flamingogold but I wonder if too much credence is given to these 3 rate cuts. It could be 1/4% each time and I don't think that will have too much impact out here in the real world. Certainly the market will react positively to any rate cut but is the inflation rate we are given accurate. It always seems when I am shopping for any goods or services that the cost increases are way beyond what government tell us it is each month. In conversion with someone yesterday who has great contact with small businesses in our area they said that MANY of these people are still struggling with ever increasing costs in all areas of their operations and that there was no sign of inflation really coming down. One of the biggest problems to cause inflation is Federal Government debt emanating from Ottawa and there is no sign that we have any realistic plan to bring this under control and indeed reduce our National debt.I am starting to think that the markets have over estimated what the rate cuts will do and that it may be into 2026 or 2027 before we will truly see inflation come down to realistic levels.