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Looking at what I called “the shortish short term” in a post yesterday, I said that in that time frame the market is likely to behave as if nothing much matters besides the Federal Reserve and interest rate cuts.

The logic, I argued, works like this: We’re in the midst of a rally to historic highs premised on anticipated interest rate cuts from the Fed. As long as those promises are in the pipeline, what reason is there to sell?

But what happens in the longer short term (what you might be tempted to call the medium term even though I’m looking just three months or so down the road) when the promises prove false–or more likely when the Fed keeps its promises and delivers 2 to 3 interest rate cuts of 50 to 75 basis points and thus empties the rate cut pipeline?

The global and U.S. economy would have to be showing clear signs of weakness for the Fed to reload the rate cut pipeline in 2020. That’s not out of the question since a number of Wall Street economists say there’s a 30% or higher chance of a recession in 2020. That would indeed bias the Federal Reserve to another round of interest rate cuts, but it’s hard for for me see the financial markets retaining the current faith in the Goldilocks market in a recession. Remember that the Goldilocks market is predicated on 2% economic growth, 2% 10-year Treasury yields (or lower), and inflation of less than 2%. Knock out that 2% growth leg and Goldi might be a little wobbly.

Or the Federal Reserve could completely capitulate to the demands for lower interest rates from the White House ahead of the 2020 election. Could happen. President Donald Trump clearly wants to fill the two empty Fed seats with candidates who favor lower interest rates. Id like to think, though, that even in the current debased financial world, a cave-in to political pressure by the Fed would blow the bank’s credibility and send the dollar lower and market interest rates on Treasuries higher. Call me naive.

All of which means that this fall–after the Federal Reserve cuts rates again at its September 18 meeting, financial markets and especially stock prices might stall, take a breather, correct, as investors and traders try to figure out what the new narrative is that might justify stock prices moving higher from current record prices.

In the shortish short term, I wouldn’t worry too much about a coming period of confusion. September is a long way away, right–we’ve got the rest of July and all of August and half of September ahead of us before the Federal Reserve meets in September.

But I’d keep my eyes open as we approach the longish short term–especially since September could well coincide with another shut down in Washington over a failure to fund the government and a debt ceiling crisis that tested the full faith and credit of the United States.

Just in case, you know.