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The Federal Reserve's interest rate decisions are a major driver of the stock market. According to UBS, investors might be underestimating the extent of future

UBS: Brace Yourself for More Fed Cuts Than You Think (And How DEMA Can Help)

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Image credit: Jamie Street

The Federal Reserve's interest rate decisions are a major driver of the stock market. According to UBS, investors might be underestimating the extent of future rate cuts by the Fed.

UBS Sounds the Alarm:

  • UBS analysts believe the market is misjudging the number of potential rate cuts coming down the pipeline.
  • While the timing of the first cut is debated, UBS argues the total number of cuts will be more significant for investors.
  • Recent economic data points towards a softening economy, prompting UBS to predict more aggressive easing by the Fed.

Why More Cuts?

  • A significant gap exists between the Fed's projected long-term rate (2.75%) and market expectations (around 4%).
  • Weakening economic data, including consumer confidence and job vacancies, suggests the Fed might need to take stronger action to stimulate the economy.

What Does This Mean for You?

The number of Fed cuts will impact interest rates, potentially affecting investment returns. It's crucial to consider this in your investment strategy.

DEMA: See Through Market Volatility

Regardless of the Fed's actions, market fluctuations are inevitable. To potentially smooth out technical analysis and identify trends, consider the Double Exponential Moving Average (DEMA).

The Power of DEMA:

  • DEMA reduces the influence of older price data compared to the Single EMA, resulting in a smoother technical indicator.
  • This can help you:
    • Spot underlying trends: DEMA helps filter out short-term noise, revealing longer-term trends that might be obscured by daily fluctuations.
    • Make informed decisions: Smoother technical analysis can lead to more strategic trading decisions based on clearer trend signals.

Take Charge of Your Investment Decisions:

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