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The Flip Side: Why the FED should cut rates
The FED won't cut rates; however, it should.
The fundamentals of companies are much stronger than they are at 2000. Yet, the Nasdaq is still trading below the level in 2000. Also, the S&P 500 index is trading at 15x earnings. If the market were trading at 18x earnings, the Dow would likely be trading at around 14,000, instead of 12,500. A Fed rate cut would allow the market to reflect its true valuation.
I think inflation should be between 3-4%, not under 2%. The Canadian bank has 4.5% interest rate, Britain has a 5.25% interest rate, and Europe is at 3.75%.
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