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The U.S. economy now appears to be heading into Quad 4 market scare.

In our model, Quad 4 is an environment of U.S growth slowing, inflation slowing. That spells trouble ahead for the market. And so the question becomes, how will the Federal Reserve react? And how fast?

In this recent clip above from The Macro Show, Hedgeye CEO Keith McCullough explains that the second the Powell Fed sniffs out a potential move towards Quad 4, they will very likely cut rates.

“That’ll be your liquidity signal, and then you bounce back to Quad 3,” McCullough explains. “I’m looking at a three month window of big-time risk that has already started to develop.”

Watch the full clip above for more insight.

McCullough: Coming Quad 4 Scare = Dovish Fed - the macro show