Part 9/11:
If the Fed cuts rates as inflation subsides, the immediate effect should be an economic "sugar rush," boosting markets and economic activity. But this stimulus often leads to excessive speculation, inflating asset prices and sowing the seeds for future instability.
Indeed, current market dynamics reflect this pattern: rising stock prices amid signs of an economic slowdown. Many traders and investors are optimistic about further gains, leading some to believe that stocks will push higher into new peaks.