Looming doom in the jobs sector?

The market seems to be holding its breath for the shutdown-delayed jobs report on Wednesday

President Trump calls the current Fed chairman “Too Late” Powell.

I don’t always agree with his mockery — though I admit it is effective for garnishing media — but in this case I do.

In my opinion the Fed has moved too slowly in dropping interest rates and its hurt the job market.

I know the Fed says they have a dual mandate to protect jobs AND inflation, but it feels like they just care about inflation.

Somewhat understandable given the nature of their experience with stag-flation of the 1970s (a period of history that I didn’t personally experience, but studied in detail during my college Economics class).

We saw this fear of inflation in their response to President Trump’s tariff announcement day.

Though, to be fair, the markets reacted poorly to that too.

Except the markets quickly corrected back to bullish sentiment as soon as they saw that tariffs weren’t the “end of the world” scenario they feared.

I wish the Fed had knee-jerked bullish too.

They seem to think that the current interest rate levels are basically fine for both curbing inflation and keeping jobs rolling.

I’m not so sure.

I think that jobs market has been hit harder than they expect and by keeping the interest rates higher they are hurting the businesses that would bring in the bulk of those jobs.

Especially the small-cap businesses like we see reflected in the Russell 2000 Index.

(What? You don’t track that one?)

We won’t see another Fed meeting until March.

Current signs point to that one remaining rate-cut free ... just like January.

The bigger question the market is asking:

How bad does unemployment have to be to shake the Fed into cutting rates again?

Right now, the prediction is the report remains steady at 4.4% unemployment. Not catastrophic, but not great either. But if that number rises — and I feel like it will but I have zero data to back that up — then it’ll put more pressure on the Fed to cut rates.

But, that’ll probably be a little too late.

Just what we expect from Mr. Powell.

Despite all of this uncertainty, there are ways to trade the markets where you bring in more and more money into your account week after week.

My preferred system collects premium every week and basically rejects the idea of realizing a loss (of course there are a handful of times when I will accept a loss, but it’s less than 5% ... I like winning.)

I’ve even got a community where I walk through my own trading account live and show you what I’m trading. You know, for your own education, not advice. I’m not an advisor.

Anyway, if you’re interested, here’s the link:

» Trading EmpIRA (course & community) «

— Ricky Ketchum