Good morning contrarians! Stock futures are quiet after a major sell-off yesterday as we process earnings and await FOMC meeting minutes this afternoon…

Have said for some time that investors who were hoping (much less planning for) rate cuts later this year were on a bit of a fool’s errand. At the very least they were rooting for an outcome of economic recession that would require the Fed to take this course of action.

Yes, things could certainly get bad enough quickly enough for the Fed to have to start cutting interest rates, and fast. We’ve seen this several times in living memory (Covid, late summer 2008, Sept. 11, 2001). But in light of everything the Fed has said about price stability, and with these last inflation readings coming in hot, it would probably take something equally drastic to get this reversal so soon.

Perhaps the market action these last couple of weeks is a rude awakening to this reality. Perhaps the meeting minutes today will not provide the needed relief either. Perhaps that will lead to more selling. One has to at least consider these possibilities and conclude that maybe this is not a great time to add risk to one’s portfolio.

There’s a contrarian take to all of this of course. But just because you’re contrarian doesn’t necessarily make you right. Sometimes it just makes you contrarian.