The worse the economic data looks, the closer a rebound opportunity may be. Does that sound contradictory? But history tells us that panic often breeds turning points.

When ADP employment data plummets, the screen is filled with cries of “the economy is collapsing.” But I’m paying more attention to another signal—the Fed’s rate cut expectations are heating up like crazy. Now the market is pricing in an 84% probability of a rate cut at the December policy meeting. This high level of certainty is the real strategic window worth seizing.

At the December 9-10 FOMC meeting, it’s highly likely we’ll see a “25 basis point rate cut, but with tough talk about being cautious going forward.” Sounds like giving candy with the left hand and taking it back with the right? Exactly, that’s what’s called a “hawkish cut”—they cut rates, but don’t expect too many more cuts after that.

Why is the Fed’s move so clever? Look, there’s heated debate inside the central bank right now, and it’s expected there could be as many as four dissenting votes at the December meeting. The bigger the disagreement, the harder it is for them to choose between inflation and growth. A “hawkish cut” is the optimal balancing act: it gives a boost to the weak job market (( the unemployment rate is already at 4.44%)), while using forward guidance to cool the market and hinting there may only be two cuts in 2025.

Here’s a counterintuitive logic—the worse the economic data, the higher the likelihood of a rate cut. Because the Fed has a dual mandate: stabilize prices and maintain employment. When employment data is clearly disappointing, they must act to prevent the economy from sliding into a recession abyss.

Powell himself admitted that the rate cut decision in October was “as risky as walking a tightrope,” and also said that “the next steps will be more cautious.” But this caution isn’t pessimism; it’s about keeping enough policy ammunition for the future. Those who get it, get it—the real opportunities often hide when the market is at its most anxious.