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We’ve said it before, we’ll say it again … peaks are processes, not points. That’s become something of a mantra here at Hedgeye. Phase transitions are rarely smooth.

We maintain that the U.S. economy began its peaking process in Q3 of 2018. Now, as Hedgeye CEO Keith McCullough explains in the clip above from The Macro Show, it’s looking increasingly likely that the U.S. dollar will partake in that peaking process (we went bullish on the dollar in April of 2018).

“The peaking process has a lot of rallies in it. But the final part of the peaking process is that the dollar won’t go down, energy goes to $50 and then some time in August the Fed panics and then goes to a 50-basis point cut,” McCullough explains above.

“You go from the October to the December low, you bounce big time, then you fail big time, then you bounce in May and everybody thinks, ‘We’re all good, it’s going to be Fed cuts, Quad 3, we’re all good. The economic cycle and down earnings aren’t going to matter.’

That I am not going to be long of.”

Watch the whole clip above.

McCullough: Economic Peaks Are Processes, Not Points - the macro show