Well, I think it is a bit of a toss-up, I think, Fed officials aren't quite sure what they want to do, but my inclination is to believe that they'll pass on a December rate cut, that there will be another pause, they'll reconsider at the beginning of next year. As Fed Chair Jerome Powell recently said, over the past year, they've already lowered the federal funds rate by 150 basis points, and maybe it's time to just give it a rest and see how it all plays out in the economy and also wait for some better data to understand where the economy actually is. But right now, I think they still need to be concerned about inflation. And obviously in the labor market there's some issues, but I'm not sure that those issues can be solved by lowering interest rates.

I think it wouldn't be much of a surprise because Fed Chair Powell already signaled that in his press conference a couple of weeks ago, and the market did sell off on that but then regained its footing mostly because the earnings story is still very good. There's a lot of concerns about the economy, but I think the economy is actually proving, has proven and will continue to improve remarkably resilient. And we see that in earnings. They say that the stock market is not the economy, but earnings are the economy. The stock market is very much influenced by what's going on in the economy as reflected in earnings. The earnings picture in the first quarter was surprisingly good, same in the second quarter. Now we're getting to the tail end of the third quarter earnings reports and they also look amazing, amazingly good. Instead of a 6.5% increase year-over-year, earnings are coming in at 14% on a year-over-year basis. And that's what's really driving the market.

Not to me. As a matter of fact, last year when the Fed started cutting rates, I said that might be a mistake because the economy was stronger than they were thinking. The labor market at the time certainly looked stronger than they were thinking, and that proved to be right. But they went ahead, they didn't listen to me. They cut the Fed funds rate by 100 basis points for September to December of last year. And guess what? The bond yield went up; bond yields rose 100 basis points, more than offsetting the easing of the federal funds rate. It kind of looks like the same thing is happening right now. They cut by 25 basis points and then 25 again, so we've cut 50 basis points here in September, October, and yet the bond yield is sticky around 4%. Mortgages are also sticky around 6 to 6.5%. So the Fed's got to appreciate that the Fed funds rate, while they can control that, they can't control the rest of the yield curve, and the rest of the yield curve is sort of saying no mas, let's not go, let's we don't really need it.

You're asking the wrong guy because I think the neutral rate is a delusion. There is no such thing; we can't measure it. And if we could measure it, it wouldn't necessarily be fixed. I think we only really know it after the fact. Factually true is the labor market is tight even with its problems, unemployment rate is 4.3%, inflation is still above the 2% target but probably will drop to 2% over the next six months once the tariff shock is over. So we're kind of at Nirvana, where we should be. Which leads me to conclude then: why are we lowering interest rates and why is the bond market resisting it? I think bond yields at 4 to 4.5% and fed funds rate at 3.3 to 4% is where the economy continues to thrive.

I'm looking for the S&P 500 to reach 7,000 by the end of the year. It's been a volatile year. I reserve the right to change my opinion as often as the president changes his mind about tariffs. I started the year at 7,000, gave in some during the tariff uncertainty, but remain bullish and I'm back at 7,000, only 2% away. By end of next year, I expect 7,700, a 10% increase. I think it's still very much a bull market. I started back in 2020 arguing this decade could be the roaring 2020s, and so far so good. I don't think it will end badly like the 1920s.

I think there already has been some bounce. The market rebounded somewhat on Friday, a down day, then a very good Monday, as Congress was perceived to be on course to open the government. So I think this is pretty much discounted.

I've never had an opinion on gold because I'm an old-fashioned strategist needing income and dividends, but gold doesn't provide that. When gold price rose above 2,000 to a record high last year, I thought it might be a major breakout mostly related to Russia invading Ukraine with sanctions freezing Russian reserves and European and other central banks accumulating gold. Another factor is Chinese investors losing money in property and stocks, turning to gold to increase net worth. Gold passed 3,000 early this year, I projected 4,000 by year-end and we got there a few weeks ago. Now I'm looking at 5,000 by end of next year and 10,000 by the end of the decade – similarly for the S&P 500.

I continue to be a contrarian, not for its own sake but because that's where I'm headed. Gold had an 8-10% correction. Many look at the DXY which is 57% euro-weighted, and the euro is not a compelling dollar alternative. Many miss the role of stablecoins, digital dollars backed by liquid assets like Treasuries. The Genius Act legitimized stablecoins, and many will be dollar-backed. This will support the dollar's strength. Emerging markets are adopting stablecoins to overcome underdeveloped financial systems.