Fed

Higher For Longer

Feb 22, 2024 2 min read paid

We've been in the higher-for-longer camp regarding the outlook for the federal funds rate (FFR) since the end of last year. That outlook was confirmed by the release of January's FOMC minutes yesterday and today's speech by Fed Vice Chair Philip Jefferson. The Fed wants to see more progress bringing inflation down and is in no rush to ease given the strength of the

Ed Yardeni

Inflation Scare

Feb 13, 2024 2 min read paid

Today, January's CPI inflation rate was slightly higher than expected. But the upside surprise was enough to convince investors and traders that the Fed is less likely to cut the federal funds rate (FFR) soon or by as much as they expected over the next 12 months. The 12-month federal FFR futures rose to 4.44% today, up from 3.74% on January 15 (chart). That amounts to

Ed Yardeni

Powell On "60 Minutes"

Feb 5, 2024 2 min read paid

Fed Chair Jerome Powell wants to make sure we all get the message he delivered at his presser last Wednesday. So he appeared in an interview on "60 Minutes" Sunday night. His simple message is that almost all the members of the FOMC expect to be cutting the federal funds rate (FFR) this year. They are happy with the progress that has been made in bringing inflation down

Ed Yardeni

The Economic Week Ahead: February 4-9

Feb 4, 2024 2 min read

Now that the latest meeting of the Federal Open Mouth Committee is over, we can expect lots of chatter from its members. They are likely to echo Fed Chair Jerome Powell's comments in his presser last Wednesday. In essence, he said that the Fed is done raising the federal funds rate further, but is in no rush to lower it either. According to the 12-month federal funds rate

Ed Yardeni

What Will Powell Say?

Jan 29, 2024 2 min read paid

Fed Chair Jerome Powell might disappoint the markets on Wednesday, when he conducts his press conference to discuss the decision of the latest FOMC meeting. He will say that economic growth has been better than expected and that inflation seems to be falling towards the Fed's 2.0% target faster than expected as well. He knows that the markets are expecting five 25bps cuts in the federal funds

Ed Yardeni

Market Call: Between Iran & A Hard Place

Jan 28, 2024 3 min read paid

Geopolitical events and crises rarely influence Fed policymaking. This time it might be different. The war that began on October 7 between Israel and Hamas is turning into a regional conflict in the Middle East. On Sunday, Iran-backed militants killed three US service members and wounded many more during an unmanned aerial drone attack in northeastern Jordan near the Syrian border. This latest escalation increases the risks of disruptions to

Ed Yardeni

What Is Powell Thinking?

Jan 17, 2024 3 min read paid

This question was partially answered yesterday in a speech by Fed Governor Christopher Waller: "This cycle, however, with economic activity and labor markets in good shape and inflation coming down gradually to 2 percent, I see no reason to move as quickly or cut as rapidly as in the past. The healthy state of the economy provides the flexibility to lower the (nominal) policy rate to keep the real

Ed Yardeni

Bad Apple?

Jan 3, 2024 2 min read paid

The MegaCap-8 stocks led the S&P 500 down during the first two days of trading in 2024 (chart). The moves came after Barclays downgraded Apple on Tuesday and lowered its price target for shares of the company on fears of slowing iPhone 15 sales in China. We warned you about companies with exposure to the weak Chinese economy on December 26 in our QT titled "Prepare For

Ed Yardeni

Bond & Stock Prices In Mini Meltup Over Soft Landing

Dec 14, 2023 2 min read

Investors are obviously relieved that the economy may be on a sustainable soft-landing path and might avoid a recession (again) in 2024. They are especially relieved that Fed Chair Jerome Powell recently implied that he and his colleagues are relieved about this too and are talking more dovish now: (1) Waller. For example, two weeks ago, Fed Governor Christopher Waller, in a November 28 speech titled, "Something Appears to

Ed Yardeni

A Christmas Market For The Bull? S&P 500 At 6000 In 2025?

Dec 10, 2023 3 min read paid

Christmas is in two weeks. This year's Santa Claus rally started early, i.e., on October 27. Will it last through Christmas? Will the rally continue through the end of this year, and maybe through the end of 2024 or even 2025? We think so. In our November 3, 2022 Morning Briefing, we wrote that “we think the S&P 500 bottomed on October 12 and see

Ed Yardeni

The Economic Week Ahead: December 11 - 15

Dec 10, 2023 2 min read paid

The big event of the week will be the FOMC meeting (Tue & Wed) followed by Fed Chair Jerome Powell's presser (Wed @ 2:30 pm). December's Summary of Economic Projections (SEP) will be released along with the Dot Plot after the meeting. The markets have most likely fully discounted what Powell will say and what the SEP and Dot Plot will show. Powell will say that

Ed Yardeni

Loose Fed Lips Sink Yields

Nov 28, 2023 2 min read paid

Not much happened in the stock market today even though the 10-year bond yield fell to 4.34% from a high of 4.98% on October 19 (chart). The 2-year yield sank to 4.73%, the lowest since July 17. This morning, Fed Governor Christopher Waller warned that inflation is still too high. But he also said that if inflation continues to cool “for several more months—I don’t

Ed Yardeni

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