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Payne's Perspective: July 8, 2024: Irrational for (much) Longer

By Charles Payne CEO & Principal Analyst

I enjoy discussing the economy with the best economists on Wall Street, but it's also very frustrating. Trying to get them to extrapolate data in a forward-looking way is an exercise in futility.

I often use the ‘skate where the puck is going’ analogy but with little success. I have also talked about quarterbacks throwing the football to the spot they expect the receiver to be, not where the receiver is upon releasing the pass – but they don’t watch football, either.

Instead of seeing risks, they have uniformly mentioned ‘normalization’ and ‘normal’ to underscore their overconfidence that the economy is coming in for a soft landing.

I've decided to try a fresh analogy to focus on the risks of the Fed waiting too long to cut rates.

A person hit by a car going 20 mph has a 90% chance of survival. Conversely, if the vehicle is going 40 mph, there is only a 20% chance of surviving the collision.

Right now, the Fed and most Wall Street economists see the economy slowing at 20 mph, but I think it's 30 mph at best, which will be 40 mph by the time rate cuts have begun.

A graph of people walking and drivingDescription automatically generated with medium confidence

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Charles Payne
Wall Street Strategies


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