Louis Navellier says a major shift may already be brewing beneath the surface of the market.
Listen to the audio version of this article (generated by artificial intelligence).
Editor’s note: For nearly 50 years, Louis Navellier He studied the Federal Reserve’s cycles and the way they reshape leadership in the stock market. During that period, he gained a reputation for spotting key trends early – especially in small, fast-growing companies that tend to make the most of it when cash conditions begin to ease.
For now, Lewis believes Wall Street may be underestimating what is developing behind the scenes at the Fed.
I’ve invited him here today to explain why two men linked to one of the most famous transactions in financial history—the British pound’s 1992 collapse—may soon play a major role in shaping the next phase of American monetary policy. Lewis also explains why he believes this shift could create a rare opportunity in penny stocks, and why he’s preparing to discuss it in more detail In a few hours during his free eventwhere he will also share one stock recommendation with attendees.
This is your last chance to register. You can do this by clicking here.
Here’s Louis…
On September 16, 1992, the British government was fighting for its financial life.
For months, currency traders have been circling the British pound. The pound was pegged to European currencies at a rate that most people thought was untenable. The UK economy was weakening. Inflation was high due to economic growth in Europe after the fall of the Berlin Wall.
The math didn’t work. And one man – George Soros – decided to bet on it.
What followed was one of the most exciting days in the history of global finance.
Soros sold $10 billion worth of British pounds.
The Bank of England responded by buying pounds by the billions. It raised interest rates twice – from 10% to 12%, then to 15% – in one day in a desperate attempt to defend the currency.
But it didn’t work. By evening, it was over.
The British government surrendered. It unpegged the pound from Europe and later began a series of cuts, bringing the interest rate down to 6% by early 1993, sparking an economic recovery.
As for Soros, he made more than a billion dollars in one day. This date has gone down in history as Black Wednesday.
I’m sure many of you know this story. But I bet you all didn’t know who was in the room either.
As you can see, two men connected to this trade are about to take charge of US monetary and fiscal policy simultaneously. I don’t think most investors have connected these dots yet.
I’m talking about Treasury Secretary Scott Bessent and Kevin Warsh, the next Federal Reserve chairman.
I’ve been at this for nearly five decades. I’ve seen every market cycle and every Fed regime come and go. And I want to tell you directly: I think this combination represents very good news for your investment portfolio.
In this article, I’ll explain the relationship between Besant and Warsh – and why I think it’s good news for investors. I will also give you my predictions for the next step the Fed will take and how it will take its stance before everyone realizes it.
I’ll also go into more detail Fed shock It happened Later today One o’clock in the afternoon Eastern timewhere I’ll share my most convinced picks and a free stock recommendation just for attendees. (It’s only a few hours. Click here to reserve your place now.)
What the market is missing
Our Chancellor of the Exchequer – Scott Besent – was part of the team that did the Bank of England transactions for Soros.
Kevin Warsh comes from the same world. After leaving the Fed in 2011, he went to work for Stanley Druckenmiller, the trader who actually executed the Black Wednesday trades. Druckenmiller and Bessent have remained close ever since.
These two men know each other, trust each other, and operate according to a common playbook. This playbook calls for lower prices.
Warsh has been a vocal critic of the Fed for years. He doesn’t like quantitative easing—money printing that has swelled the Fed’s balance sheet to nearly $7 trillion. But he also believes that productivity gains driven by AI are fundamentally deflationary (meaning they will lower prices).
Meanwhile, Besant is one of the most capable economic minds in Washington. He has publicly called for cuts of 150 basis points – 1.5% – fully aware of the country’s spiraling debt burden.
I think he and Wersh will work together, and I think they will move faster than the market expects.
How can we benefit from the new Fed system?
I’ve seen this movie before. Four times, to be exact.
Every time the Fed opens a sustained cycle of interest rate cuts, the same dynamic is at play: Smaller, domestic-market-focused companies — the most sensitive to borrowing costs and the most to benefit from U.S. economic growth — become the biggest winners. Not right away. But continuously and greatly.
Here’s what happened the last four times:
- The Fed’s pivot in 1995: Cisco +2,062%. Rise +2,800%. America Online +2,900%.
- Interest rate cuts in 2001: Frontline +1,513%. Hansen Natural +1.125%.
- Interest rate cuts in 2008: Lithia Motors +475%. IPG Photonics +665%.
- Covid Sale 2020: Mara Holdings +1,800%. Moderna +1,200%.
Various stocks. Different sectors. Same dynamic every time.
Now, I’m not naive about what we’re dealing with. There is a war on. Inflation is still a factor. The Fed is moving slower than anyone would like, and Warsh will need to build consensus on a twelve-person committee.
This won’t happen overnight.
But the trend is clear. The players are in their places. History says this is the way things work.
Exclusion list
My Stock Grader system has actually been running throughout this early phase of the cutting cycle – and has flagged 53 stocks that are showing the same early signals I described in each previous window.
Strong fundamentals. Building institutional buying pressure. Highest consistent ratings in my eight factor model month after month.
I call it Exclusion list. These are stocks that are too small for big Wall Street funds to touch — but they’re not too small for you.
today One o’clock in the afternoon Eastern timeI’ll be going live to share my most convinced picks from that list. I think these are the names that are best positioned for what’s to come. I will also be offering a free stock recommendation just for attendees.
Get locked in.
Click here to reserve your place now. Remember, the event is only a few hours away, so this is your last chance to register.
I will see you there.
sincerely,
Louis Navellier
Senior Analyst, Investor location
