What history tells us about where the economy might be headed

Jeffery Hirsch, Editor in Chief of The Stock Trader’s Almanac, joins TheStreet to discuss where the U.S. economy might be headed.

Transcript

00:00How does the Fed factor in to what is going to happen to stocks in 2025?

00:08The market's going to want them to to keep rates lower.

00:11It's going to be great for small caps and, you know, U.S.-based companies.

00:18If they falter and don't behave properly

00:22and don't act wisely like they did with their, you know,

00:26transitory inflation behavior back in early 2002, there's going to be a problem.

00:31But I think what we're seeing forward, based upon today's inflation numbers

00:36and their history, we're probably going to get a quarter point

00:40cut here in December and then another one in March,

00:44June, September and December, one every quarter

00:47when they put out their economic projections to get us down

00:50to the sort of neutral rate environment where it'll be right around the three,

00:54three and a half percent GDP.

00:56And if they stay on that track, I think the market will be very happy.

01:00Does history offer any warnings or clues

01:04about the state of the economy right now?

01:10Well, I mean, some of it's not necessarily history,

01:13but historically, the type of economic readings we're seeing here,

01:16I mean, the GDP growth is solid.

01:19The labor market, you know, it ticked up a little bit.

01:21Some of the unemployment that's, you know, stabilized.

01:25I'm just seeing, you know, solid numbers across the board

01:28in economic readings.

01:30Historically, you know, I look at some of these post-election years

01:32that were rough, especially for new Republican administrations.

01:35Fifty seven, sixty nine, seventy three.

01:38Fifty seven was the Cold War.

01:39Sixty nine, seventy three were Vietnam and all were plagued by recessions.

01:44OK, I don't see any recessionary indicators,

01:46that whole inverted yield curve indicator that's been,

01:50you know, they threw the flag on that.

01:51That didn't work.

01:52I was not a proponent of it at all.

01:54So history tells me that economy is strong, economy is resilient.

01:59I don't want to say robust, resilient, which will take.

02:03And things are things are doing well here.

02:05I mean, better than most most the rest of the world right now. So.