Part 5/9:
Reflecting on past market behavior, particularly from the previous year, Eisman notes that markets often anticipate Fed policy moves. Last July, investors expected rate cuts which did not materialize until September, leading to significant changes in market dynamics. The subsequent cuts from September to December surprised some, as the economy proved resilient despite fears of deceleration.
He infers that this historical perspective supports a cautious optimism—that similar gradual policy adjustments can be used to sustain economic growth without risking a downturn. The key, he argues, is understanding that such measures are incremental rather than revolutionary.