Just two weeks ago, stocks achieved their strongest performance of the year, led by an especially strong rally in AI stocks.
And it was all thanks to the U.S. Federal Reserve.
At its most recent meeting, the central bank confirmed that multiple rate cuts are coming this year. That opens the door for this AI stock boom to enter hyperdrive mode.
You thought the rally has been impressive so far? You ain’t seen nothing yet.
The Market Reaction
Going into this past Fed meeting, investors were worried. Back in December, the Fed initially signaled that three rate cuts were coming in 2024. And that sparked a big stock market rally.
But since then, inflation has consistently surprised to the upside. And the overall U.S. inflation rate has stopped falling. Instead, it’s stabilized right around 3%, which is above the Fed’s 2% target.
Consequently, investors were afraid that because inflation is flatlining above that target, the Fed would walk back rate cuts.
It didn’t. Instead, it reaffirmed that three rate cuts are coming this year.
Just as important, we noticed that Fed Board Chair Jerome Powell’s language shifted in his post-meeting press conference. Previously, he’s said something to the effect of, “we need to see inflation come down to 2% before we cut rates.” But now that’s evolved, more along the lines of, “we’re pretty confident that inflation will come down to 2%, and so we’re pretty confident that we’ll be cutting rates multiple times this year.”
He seemed entirely unphased by inflation’s recent relative “stickiness.” And we don’t think he should be phased by it either.
Since 1950, the “average” inflation rate in the U.S. economy is 3.5%. We’re below that right now. Therefore, while inflation is stabilizing above the Fed’s target, it’s more importantly stabilizing below the long-term average inflation level. And that means the Fed shouldn’t be worried and should proceed with rate cuts this year.
That’s exactly what it’s going to do. The central bank confirmed as much at its March meeting. And that is super bullish for stocks.
Learn From Recurring Market Patterns
Whenever the Fed cuts rates and the economy is still growing, it opens up a massive wealth window for investors. It happened in the mid-80s, mid-90s, late ’90s, and 2019.
Each time, when the Fed cut rates while the economy kept growing, stocks soared. We are about to get that exact same recipe this year, meaning a major wealth window is about to open.
This wealth window is going to be particularly big in a certain subsector of AI stocks – and it’s likely not one you’ve heard being mentioned before. I’m not talking about AI chip stocks, software stocks or robotics stocks.
Instead, I’m talking about a different type of AI stock that – thanks to a unique and powerful confluence of factors, including a monumental shift in federal government policy – could soar the most of all AI stocks once the Fed starts cutting rates.
Right now is the time to load up – before the Fed does cut.
The Final Word
Just this past Wednesday, March 27, I held an urgent briefing on this wealth window, where I shared all my insight about this little-known subsector.
Plus, I detailed my top six plays for Washington’s “AI Blitz” and even gave one of them away, completely for free.
If you missed this presentation, don’t worry. You can still catch the replay here…
But only for another few hours.
My publisher is closing this opportunity at midnight EST tonight, April 2, so time is of the essence here.
Tune in to learn how to get prepared for an incoming wave of wealth. And get the stock pick that our system just flagged as a “Strong Buy” with huge short-term upside potential.
Watch the briefing while you can.
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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