SEPTEMBER 16, 2026 – The Fed did as the market instructed and raised the Fed Funds Rate by 25bp today.
Over a year ago, my August 12, 2025 post said it was more likely that an increase would occur than a decrease. I am confident I was the only person who said an increase was coming. A year later we got it.
How did I make such a forecast when nearly 100% of the pundits forecast further declines? I have mentioned it many times before – the Elliott Wave Theory. The EWT has let me tell you for the past 18 months that interest rates would soar well over the 5% level. And they have done just that.
ECONOMY – An interesting disagreement between two recession predictors may occur soon. The stock market has clearly said there will be no recession through the 1st Quarter of 2027. In my August 1, 2025 post, I mentioned the yield curve is another recession predictor. Back then it was at -35bp. Today it is around +65bp. I mentioned that when it gets to +100bp we are in a recession. The good part is it moves slow. So, we know well ahead of time if it says we are in a recession. 13 months later it has moved 100bp and is 35bp from the 100bp target.
I hope I don’t have to make a call between these two indicators. If I do, I will side with the stock market. It is a reflection of how the smart money sees the economy in 6 months. The yield curve is simply a math equation.
To avoid this conflict of indicators, either the stock market needs to drop soon and significantly or the yield curve needs to flatten out.
As always, we shall see. No need for me to opine now. We have time.
Shalom,
The Mann