The FED made a 50 basis point cut yesterday as I predicted. In fact, even calling it a prediction is wrong. The FED had already given many clues about it. Despite this, many people still believed in 25 basis points. Yesterday, I learned that 105 out of 111 economists who made these predictions in America expected 25 basis points yesterday, I was a little surprised. However, the FED had already given all the messages. The market's reaction was first an increase. Then it decreased, as I expected. In other words, it did not react excessively either upwards or downwards. Everything was as expected anyway. It also confirmed the 100 basis point cut until the end of the year. The FED said they predicted 2.6 inflation by the end of the year. It said unemployment could increase a little more to 4.4%. It created a small gap for itself there so that the market would not panic when the new employment data came. The reaction of the 10-year and 2-year American treasury bonds was a little surprising. Interest rates increased there, in other words, those bonds suffered sales. Normally, when the FED lowers interest rates, they should also receive purchases. Maybe it was just a profit-taking transaction. That's why I don't want to give it too much meaning. I will follow it in more detail in the coming days.

What's even more interesting is that commodities fell yesterday. I was a little surprised by that. Because in a period when the American economy will be relaxed, commodities should rise a little. Maybe there is profit-taking there too. Because, as you know, people buy expectations and sell the news. Maybe there was an increase in commodities in the last few days. I don't know exactly why it was sold yesterday. We will still follow it, of course. Especially this increase in American treasury bonds should not continue. Because what the FED wants is to ease economic conditions. But when the interest rate on treasury bonds increases, economic conditions actually become difficult. Because the FED's interest rate decision is not the main driver of the markets. In other words, when you go and get a mortgage loan today, the interest rate on treasury bonds is more important, the market interest rate is more important. I will continue to follow it for a few more days, which is a slightly stressful period. But ultimately, America is now moving towards becoming a country of lower interest rates.

Now of course the fear-mongers will immediately say that since the FED has reduced the prices by 50 basis points, a recession is definitely coming. They tried this yesterday. The markets did not care much. Right now, I see that the markets seem positive in the early market. But this will be tried again in the coming days. Because they have a certain rote that if there is 50 basis points, there is definitely a recession. But this time the conditions are different, inflation is around 2.5%, interest is around 5.25. In other words, we are coming from a very different place and we do not have any data showing a recession yet. Yes, the data is a bit delayed, the data is revised retrospectively. Even the FED chairman complained a little yesterday. Especially the fact that the data in the employment market is corrected very retrospectively, but if there were such massive layoffs, this would be reflected in the press anyway. It is certain that America has a slowing economy. Perhaps this intervention will prevent it from slowing down even further.

Of course, we should not dream like this. In other words, not everywhere suddenly revives just because there is a 50 basis point reduction. Because it takes time for this to flow into the economy. 50 basis points is already a very low figure when we consider how high the interest rates are. But these things have taken a positive turn. A 100 basis point reduction is expected this year, and another 100 basis points next year. It seems that it will drop to around 3.5% by the end of next year. I think they will drop even more, but we will watch together. Powell also spoke very softly and reasonably. He said that our priority is employment now. He declared victory, in other words, he said that I was able to reduce inflation without putting the country into recession. At least that is what is visible now, and he explained this idea very pleasantly. He has also guaranteed himself a good speaker career. It seems that he has guaranteed himself a Treasury Department in another government in the future.

So should we believe all the data? The coming days will show if there really is no recession. It will take a long time for the market to be sure, but my guess is if America does not enter a recession in the fourth quarter, which it is almost certain it will not in this quarter. Yesterday, the Atlanta FED revised the growth rate for the third quarter of America to 3%. Because if we do not have any problems in the fourth quarter, that is, if we grow by 3%, we will not suddenly enter a recession. In other words, while interest rates are falling, companies will actually start buying again and making investments for the period after. I still think there will be no recession. The market is currently pricing this in. In a place where there is no recession, interest rates are falling and inflation is reasonable, stocks will go up. Of course, it does not go the same for every stock. Those most negatively affected by high interest rates will do well. On the other hand, remember that technology companies were almost never affected by high interest rates. In fact, on the contrary, most of them peaked. So technology stocks should not always be the ones to go fast. I predict that there will be better increases in other areas such as real estate, automobiles, in other places that are negatively affected by high interest rates.

After the interest rate cuts, traditional sectors such as the health sector have always done better. Of course, not every cycle is the same. There were many clichés about September. I shared some of those clichés. September will definitely be bad, and the same things were being said about August. After all, the markets had finished positively in August, albeit slightly. There is a possibility that we will be positive in September as seen now. But it would be healthier if we did not look at it in such a short term and extended the term to one year. Because when we look at one year, America will now have companies that do business with lower costs in a lower interest rate environment. Their incomes will appear higher. Because the dollar has fallen. Therefore, balance sheets will be more positively affected. Costs have fallen in the labor market. Companies will be able to produce at lower costs. In other words, sooner or later, if we invest in companies as stock investors, the picture there should be positive, but if the term is long. We will be a little more shaken in the short term.

The Central Bank of Japan will announce interest rates tomorrow. I don't expect an increase. If an increase occurs, I think it will have a negative impact on the markets. There may be a hawkish speech if the increase does not occur. That may also affect it a little, but I don't expect a big story. Because you have to think like this; Stock exchanges generally price in what is predictable. What Japan can do right now has been priced in in a way. Of course, it needs to be monitored closely. Then we will always monitor these two data sets closely; is there anything indicating a recession and is there any sign of inflation reversing. Because what will happen now, when money becomes abundant, inflation is always expected to go up. We will see whether or not there will be alarming numbers there. I don't expect much. Because the issue that kept inflation high was basically housing. As mortgage loans decrease in housing, housing costs will actually decrease. People will consider changing their homes again. Therefore, I think more houses will enter the market.

So I think there will be a relaxation in that item. There is deflation in most of the other items anyway. For a long time, especially on the products side, so I don't expect such a sudden reaction in inflation. But of course we will follow that too, and after all, if there is a low inflation, low interest rate environment, the values ​​of American companies should increase. This will also have positive effects on the world. Because America is the largest economy. All central banks follow the US Federal Reserve. I have always been a bull since October 2022. Of course, there were places in between that I was worried about in short periods. I also had short tactical bearish periods, but I am still a bull right now. But I think the short term is still a bit volatile, you never know what will happen. Things seem good for a while.

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