Why we don't have to think about rate cut and how econimic and our expectations are connected.
First, I have to mention that economy is not a just a term that we are using to calculate only just numbers on our bank accounts. It has direct impact to our life and one part of it is investment.
In investment we are expecting and waiting.
Depends on how much time market participants have time to know about some crusial news and start creating their expectations.
Many traders are thinking about economy not like a system but like something that has some buttons to transfer moneys from one place to another.
So, we have simple logic which is if inflation so -> rate cut.
And participants start expecting that and that expectation has its impact on the market. Simply prices can go down if not good expectations, and go up if good expectations.
Thanks to people who understand some part of the economy system and hold their positions until really bad news, thanks to you the market exist.
So, when I said about prices I meant prices of all things in every economy sector.
Many times rate cut expectations make businesses to change their strategy according to situation, but unfortunately it can lead to financial strategy distruction.