It seems that content creators have been warning for a few months about the beginning of the bear market. Maybe they are right, or maybe that would be too much predictability for a market like this. At the same time, we are facing ridiculously low percentages of interest rate cuts by the FED on January 28, and again, maybe that would mean an excessive ability to predict what will happen in the markets. Since the last rate cut in December and after Powell's speech, everything seemed to indicate that the cuts would pause, and the inflation and employment data did not seem impactful enough to mobilize the FED in another direction. And for this reason, in tools like Fedwatch, we have had a low probability of rate cuts for several weeks.
In the past few days, a somewhat surprising piece of news has appeared regarding inflation: the Truflation tool has indicated readings of between 1.55 and 1.74% inflation for prices in January at this moment. This tool has previously anticipated scenarios like the inflation spikes of the COVID era due to the FED's expansive policies. If it turns out that these readings hold up until the 28th, there could be a possibility of reversing the forecasts for a pause in rate cuts since the data would indicate that there is no excessive danger in new cuts for the inflation data, as after three consecutive cuts of 25 bp, it would have done nothing but decrease. I suppose we will have to see if these data that already place inflation within the FED's targets hold up and are sufficient to allow new interest rate cuts in the short term. And what do you think, is there room to be optimistic or have we already started the bear cycle?