Trends. Markets And the Economy: Collision Course 2025. By Gregory Mannarino

Trends. Markets And the Economy: Collision Course 2025.
By Gregory Mannarino TradersChoice.net

Immediately moving into 2025, both the bond/debt market and the stock market are on a direct collision course.
Look at the chart below of the Mannarino Market Risk Indicator (MMRI). The MMRI is 100% free to anyone who wants to use it and is available here: https://traderschoice.net/about-traders-choice/
Looking at the MMRI, you will notice two peaks.
The first peak, which occurred in mid/late April of 2024, and then the second is exactly where we are now.

The chart below demonstrates what happened to the stock market/SP500 the last time the MMRI peaked in mid/late April. There was a significant sell-off.

With that, there is no way to accurately say that currently the MMRI is peaking, the MMRI could potentially rise higher from here. (And that is a problem).
Last Wednesday the Federal Reserve cut rates another 25 basis points. With that, the long end of the yield curve from the 10yr-30yr, instead of dropping, did the just opposite. Subsequently, the stock market got hit with the Dow Jones Industrial Average dropping over 1,100 points. In the days immediately following that stock market drop, it tried to recover but couldn’t.
Now gauging from what happened to the stock market the last time the MMRI peaked back in April, this sell-off may just be getting started. It is certainly possible that the Fed. Does intervene here and starts to buy more long-term debt so to push the long end of the yield curve lower, but we have no way to predict that.
We also must assume that the MMRI, which is now on par with what happened in April may rise further still, and this “collision course” with stocks may precipitate a more significant sell off. (The key here is to watch risk, and in my opinion, here the MMRI is a very useful tool which is again 100% free for anyone to use).
What happens to the stock market moving deeper into 2025 is 100% dependent on more easy money policy/lower rates. There remains NO CONNECTION whatsoever between the economy and the stock market. With that, we will see lower rates moving forward as promised by President (s)elect Trump, and promised by the Federal Reserve. With lower rates will come significantly more currency devaluation/loss of purchasing power, meaning higher prices. With higher prices will come a lower standard of living here in the US and around the world. In 2025 central banks will continue to pressure their respective currencies and continue to artificially suppress rates, which in theory should push world stock markets higher/inflating much bigger bubbles. However, there also remains the specter of an uncontrolled sell-off in the debt market which WILL OCCUR at one point, but when? At a point which will be chosen by central banks themselves, who today are both the number one issuers and buyers of debt.
Remember this, “Cash Seeks Yield.” With that, low/artificially suppressed rates will drive cash into assets producing higher yield/greater returns. The entire mechanism of suppressed/lower rates is specifically set up to drive cash into risk assets like stocks. This mechanism could potentially keep the price of commodities down, creating an opportunity to buy more at fire-sale prices.
I expect to see cryptocurrencies go widely more mainstream moving forward AND be added to not just the US Strategic Reserves as promised by Trump, but also other nations will also follow suit. With that, we will see a more rapid push into a new system with more groundwork getting done to bridge the system into full tokenization. Expect rapid deregulation of banks, and a merger between banks and cryptocurrencies-this is THE KEY to implement the new system.
We should all expect to see a continuation of more fake data across the board, and additional economic propaganda ON A MASSIVE SCALE.
Expect to see skyrocketing debt and deficits with the potential for supply chain disruptions AND a severe economic slowdown. With that, there is the potential to see NEGATIVE rates.
Moving into 2025 we will see a continuation of the same wealth transfer mechanism which has led not just the US, but the world middle class population to where it is now. The effect of currency purchasing power destruction brought on directly by artificially suppressed rates is an economic wrecking machine, while at the same time pushing more wealth up to the elite, (the 1 and 2 percenters).