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One reason why the Fed should lower interest rates four times next year



James Bianco is on the start with a bullish call that could drive stocks higher.

The market researcher predicts that the Federal Reserve will cut interest rates not just once but several times from July.

His main reason: inflation does not exist.

"Inflation continues to surprise them and the market tells them they can cut interest rates," said Bianco Research's president on Friday opposite CNBC's "Trading Nation". The market is forecasting four price reductions next year – three in the next three [Fed] sessions. "

On Wednesday, the Fed announced that it would be open to interest rate cuts next month, as equities rallied to new highs and the S & P 500 is now well on track for the first half of the year since 1

997.

"Trust the market. She wants many interest rate cuts. It's been saying for months, "he said. They say, "Look, you have room to cut interest rates, lower your cost of capital, and maybe give more impetus without fear of inflation, so do it."

Bianco, who calls himself a "market man" Believes that the Fed should and will listen to Wall Street.

"The Fed decides when interest rates will be raised, and the market decides when to cut." And the market decides that it is time to cut short, and it often happens that they are in the Fed Kick air and scream because they think they should not, but eventually they will, "he said.

He does not believe that the market overestimates the possibility of cuts. According to Bianco, the current market environment shows remarkable similarities to the 1980s and 1990s, when the Fed cut interest rates in response to a non-inflationary environment.

"Historically, that was a good thing for the stock market," Bianco said.


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