Interest Rates

Bonds Weighing On Stocks

May 29, 2024 2 min read paid

Yesterday, Minneapolis Fed President Neel Kashkari told CNBC that he wants to see "many more months of positive inflation data" before he's ready to cut rates. He also didn't rule out a hike. Fixed-income investors are starting to realize that this is the new party line from the Fed. Earlier this year, we argued that there was no reason for the Fed to rush

Ed Yardeni
Eric Wallerstein

Powell's Plateau

May 3, 2023 2 min read

The current consensus in the financial markets seems to be that the FOMC is done hiking the federal funds rate (FFR) after having raised it today by 25bps to 5.00%-5.25%. Furthermore, markets seem to be anticipating that the FFR will be falling soon. That's consistent with the widely held view that a recession is coming soon. It isn't consistent with Fed Chair Jerome

Ed Yardeni

Markets' Message to the Fed: Just Say No to More Rate Hikes

May 2, 2023 2 min read paid

The stock market sent a message to the FOMC today: Cease and desist from any more rate hikes, please. The stock market selloff was led by another rout of the Financials sectors of the S&P 1500. Here is what they did today and since March 8, the day before SVB imploded: S&P 500 LargeCaps (-2.3%, -7.3%), S&P 400 MidCaps (-3.2, -14.

Ed Yardeni

The Fed Should Give It A Rest

Mar 20, 2023 1 min read paid

In his previous press conference on February 1, 2023, Fed Chair Jerome Powell mentioned the word “restrictive” 10 times. It was mentioned mostly in the same context as the following: “And we said that we continue to anticipate that ongoing increases in the [federal funds] target range will be appropriate in order to attain that stance of sufficiently restrictive monetary policy that will bring inflation down to 2%.”

Ed Yardeni

The Fed Chair Testifies Before Congress

Mar 6, 2023 1 min read paid

Tomorrow (Mar. 7) and the day after (Mar. 8), Fed Chair Jerome Powell will testify in hearings before the Senate Banking Committee and the House Financial Services panel respectively, to discuss the bank’s latest semiannual Monetary Policy Report (MPR). The report was released on Friday. It reaffirmed the Fed’s commitment to bring inflation back down to 2% by 2025, according to the FOMC's December Summary of

Ed Yardeni

Inflation Is Falling

Jan 18, 2023 1 min read

Interest rates fell sharply today on news that December's PPI confirmed that inflation is falling rapidly. The PPI inflation rate plunged from almost 18.0% y/y in mid-2022 to 6.2% by the end of the year (chart). Both the goods and services components of the PPI are disinflating. The PPI includes indexes for personal consumption based on prices received by the providers of the goods and

Ed Yardeni

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