9/16/25 Recap

The SPY taking a breather today as we get ready for the big event tomorrow with FOMC. There isn’t alot to say here that I didn’t say yesterday. I think you should be taking some off and if we rocket on FOMC then get back in but there is still alot that can go wrong tomorrow even if we cut rates. The dot plot could show fewer cuts and the market wouldn’t like that, so it isn’t only about will he cut which by the way as sure as everyone is, some betting sites still have an 8% chance he won’t cut tomorrow. This morning we had import prices rise surprisingly in August which means inflation is about to speed up in the months ahead. So while Trump has been clamoring for cuts, they honestly don’t seem like the wisest thing here with markets at highs and frankly, we need hikes if we’re honest about things. Anyways let us see what tomorrow brings. VIX futures are up over 2% right now sending a little warning sign as well.

The bigger concern for everyone should be that the dollar is about to fall off a cliff, and while everyone is cheering the fact their stocks are up this year, in real dollar terms, things aren’t as hot as they seem with the dollar at lows of the year. Just consider yourself lucky to be in equity markets where your assets have risen as fast as the dollar has fallen. You may be asking yourself what that line is we are up against in the chart below?

That line is literally the do or die level for the dollar going back almost 2 decades. Look at this uptrend it has been in, if the dollar doesn’t bounce here, it breaks that trend and falls into the abyss. While that would send stocks higher, the dollar going lower and breaking a trend like this is not a good thing. The dollar is down almost 15% this year, and while everyone is excited about markets, the S&P is up 13% and the Nasdaq 16% coming into today, you do the math on the real gain this year.

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