United States With rate hike odds for December now at 62%, we reiterate our belief that the Fed is raising rates in 3 months. I believe the only thing that stops it is more where the S&P 500 (and how it handles QT) is rather than what the data says which will be highly influenced by the Hurricane rebuilds. I have to say this on the Fed’s focus on ‘financial …
[Read more...] about The Day After / Philly mfr’g and claims / More…
FOMC Reading the FOMC statement was actually as exciting as watching paint dry. The comments on the economy and inflation were pretty much similar to the July meeting. There was reference to the Hurricanes and the devastating impact but shouldn’t impact growth over the medium term. On what we cared most about today, QT will start in October. As to what they will …
[Read more...] about Reading statement was like watching painting dry
My latest commentary for CNBC.com. The original can be read here. We're finally here. About nine years after quantitative easing (QE) began, quantitative tightening (QT) is about to start. On Wednesday, after the Federal Open Market Committee releases its statement, Janet Yellen will follow with a press conference that she will do her best to make as boring as …
[Read more...] about Why this market ‘is headed for a brick wall’
As the case throughout this whole economic recovery, the Fed’s Beige Book described the economic activity as having “expanded at a modest to moderate pace across all 12 Federal Reserve Districts in July and August.” Here are the other noteworthy bullet points: “Consumer spending increased in most Districts, with gains reported for nonauto retail sales and tourism, …
The August ISM services index rose to 55.3 from 53.9 in July but that was a touch below the forecast of 55.6. The average year to date is 56.3 and the October, pre election, print was 54.6. Thus, not much of a change since. New orders improved by 2 pts to 57.1 but still remains below the 6 month average of 58.8. Backlogs were higher by 1.5 pts to 53.5 which puts it in …
FOMC Minutes Bottom line with the just released FOMC minutes is this, the only thing the Fed seems comfortable committing to right now is QT in September “absent significant adverse developments in the economy or in financial markets.” As for when the fed funds rate might go up again, everyone had their own opinion that spanned the spectrum of thought, all with …
Quantitative Tightening If you had doubts about whether the Fed would begin quantitative tightening in September because of the recent inflation figures, NY Fed President Bill Dudley, a key member of the troika, is telling you AGAIN that it’s coming. He said “I think we’re still on the same trajectory we’ve been on for several years. Above trend growth, gradually …
[Read more...] about Dudley is reminding us again of what’s most likely to come
The FOMC statement is basically setting the stage for a September beginning to QT. The wording was this: “The Committee expects to begin implementing its balance sheet normalization program relatively soon, provided that the economy evolves broadly as anticipated.” The emphasis is certainly mine and “Relatively Soon” is exactly what Yellen said in her Congressional …
Canada The Bank of Canada as expected followed thru with a 25 bps rate hike to .75%. They said “Recent data have bolstered the Bank’s confidence in its outlook for above potential growth and the absorption of excess capacity in the economy. The Bank acknowledges recent softness in inflation but judges this to be temporary.” They said “temporary” because recent reads …
As we hear from a multitude of Fed members in the weeks after the FOMC statement and press conference that Yellen gives, by the time the minutes come around, it rarely leads to any new news and today’s minutes are along those lines. So, I’ll bottom line this in the 1st paragraph with more color below: Fed members went back and forth on the state of the economy with …
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor.
