George and Jonah from 1000x break down why rate cuts are still very much alive despite the market pricing them out, and why oil collapsing changes everything for new Fed chair Kevin Worsh.
Key Points
Key Highlights:
- The market had basically priced rate cuts in 2026 down to zero, yet stocks did not even flinch, a sign traders had already given up on cuts happening at all
- Oil just collapsed from over 100 down to the high 70s after the Iran ceasefire, and energy made up roughly 35 to 40% of the recent inflation spike, that alone is extremely bearish for inflation
- Morgan Stanley expects Worsh to be quieter and more vague than Powell, fewer press conferences and less forward guidance, making his tone at the podium more important than the actual rate decision
- With oil dropping this fast, Worsh does not need to stake his early reputation on a risky pivot, he can simply let rates drift lower without much resistance
- Bitcoin's MVRV Z-Score and oil are both flashing the same bullish signal right now, both hit historical buy zones at the same time
Takeaway Rate cuts are not dead, they were just priced out too aggressively. With oil crashing and inflation pressure easing, the path of least resistance for the Fed is lower rates, not higher ones.
