The NASDAQ Composite has had a nice little run, up more than 9% year-to-date. However, I would exercise caution ahead of Tech earnings and the Fed's January 31st / February 1st FOMC meeting. We have written on numerous occasions that we expect management teams to take a conservative approach to 2023 Revenue and EPS guidance. … Continue reading Technology Stocks Are Not Yet In The Clear
We had a saying on the sell-side to describe companies that would continually lower guidance each quarter rather than get all of the dirt out in the wash at once (this was pre-2005 before companies mastered the art of guidance). The Federal Reserve did not get the memo. The Fed raised its policy rate by … Continue reading The Fed: Death By A Thousand Cuts
We have updated our Fed Funds Rate increase probabilities from our previous note on September 5th: 100 BPS increase: New probability: 75%; Old probability: 50%;75 BPS increase: New probability: 25%; Old probability: 40%;50 BPS increase: New probability: 0%; Old probability: 10%. The FOMC meets on September 20th and 21st.
The two paragraphs below are excerpts from the Fed's "Staff Economic Outlook" section of the FOMC meeting minutes published today. The Fed is disingenuous in that it does not acknowledge the fact that it inflated the money supply, thus resulting in higher prices. In fact, years ago the Fed used to define inflation as "inflation … Continue reading FOMC Minutes: More Fed Propaganda
We believe that July's headline CPI number will decline sequentially from June's 9.1% print given that the price of oil has fallen back. However, we expect CPI excluding Energy to increase sequentially driven by food and shelter. It would be a mistake for the Fed to only move by 75 bps during the July 26-27 … Continue reading What’s Next For Short-Term Inflation?
Our view is that the Fed will raise the Fed Funds Rate by 100 basis points when it holds its FOMC meeting on July 26th and 27th. Today's CPI print of 9.1% creates significant political and economic pressure for the Fed to become increasingly aggressive in its approach to taming inflation. The Fed is behind … Continue reading The Fed Will Raise By 100 Basis Points In July
If the Fed were to follow today's 75 basis point increase in the Fed Funds Rate with 100 basis point increases during each of the July and September FOMC meetings, it still would not be sufficient to curb inflation this year. 2022 will be marked by a recession, elevated prices for goods and services, and … Continue reading Too Little Too Late. The Inflation Cake Is Baked.
Powell was confirmed for a second term as Fed Chair on May 12th. His nomination was held up for months in the Senate. Powell's confirmation will provide him with temporary courage - enough to talk in a hawkish manner, enough to take the Fed Funds Rate to 2% by summer's end - but not enough … Continue reading Jerome Powell Will Talk Tough This Summer
Powell's Fed will continue to run its ultra-loose monetary policy for as long as possible in an effort to inflate the debt away. On Wednesday Powell will say more time is needed for the economy to recover before the Fed considers tightening interest rates. Powell will talk of transitory inflation. Powell will quote May's poor … Continue reading The Fed Won’t Change Its Position On Wednesday