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)


blog post cover photo

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:

Other Blogs

Nov 25, 2023 6:39 AM - Parth Sanghvi

DCF Valuation vs. Comparable Companies Analysis: Choosing the Right Valuation Method

Choosing the Right Valuation Method: DCF vs. Comparable Companies Analysis Introduction: Valuation methods play a pivotal role in determining the fair value of a company, aiding investors in making informed investment decisions. Two commonly used methods, DCF Valuation and Comparable Companies A...

blog post title

Dec 23, 2023 2:19 AM - Parth Sanghvi

Understanding the Limitations of DCF Analysis: A Guide to Overcoming Challenges

Introduction: Discounted Cash Flow (DCF) analysis stands as a cornerstone in valuing investments, yet its efficacy is contingent upon various assumptions and methodologies. While a powerful tool, DCF analysis comes with inherent limitations and challenges that investors must acknowledge to make i...

blog post title

Dec 25, 2023 2:28 AM - Parth Sanghvi

Integrating Sustainability into Valuations: Navigating ESG Factors within the Discounted Cash Flow (DCF) Model

Introduction: The investment landscape is undergoing a profound shift with a heightened emphasis on sustainability and responsible investing. In this blog post, we explore the intersection of Environmental, Social, and Governance (ESG) considerations within the Discounted Cash Flow (DCF) model, h...

blog post title


Financial Modeling Prep API provides real time stock price, company financial statements, major index prices, stock historical data, forex real time rate and cryptocurrencies. Financial Modeling Prep stock price API is in real time, the company reports can be found in quarter or annual format, and goes back 30 years in history.
2017-2024 © Financial Modeling Prep