Yardeni QuickTakes (Page 97)

Dr Ed's Video Webcast 9/27/23

Sep 27, 2023 1 min read

The Fed has paused its rate hiking for now but not without warning that resumed tightening is possible. Either way, monetary policy will be kept restrictive for longer than investors previously expected, Fed Chair Powell has said. What does that scenario imply for the economic outlook? Peaks in the federal funds rate are coincident indicators of financial crises caused by restrictive policy, which often trigger credit crunches and recessions. That’

Ed Yardeni

Talking Heads Talk Stocks Down

Sep 26, 2023 2 min read paid

We were surprised that stock prices didn't drop yesterday along with bond prices. So we aren't surprised to see stock prices down today. Contributing to the selloff was JPMorgan Chase CEO Jamie Dimon, who warned interest rates may need to rise further to subdue inflation. In an interview with The Times of India, he said that the Fed might have to raise the federal funds rate

Ed Yardeni

Strikes and Shutdowns and Bond Yields, Oh My!

Sep 25, 2023 2 min read paid

The stock market held up surprisingly well today under the circumstances: The UAW strike is shutting down more auto production. The federal government is heading toward a shutdown on October 1. Moody’s Investors Service warned in a note today that a US government shutdown would be a “credit negative” event for the country. The 10-year Treasury yield surged by more than 10bps to 4.55%, the highest since

Ed Yardeni

Market Call: Powell Says Be Careful

Sep 24, 2023 2 min read paid

In his presser last Wednesday, Fed Chair Jerome Powell mentioned "careful" and "carefully" 16 times mostly to describe how the Fed will proceed from here. That sounds like good advice for investors right now. When he was asked about the impact of "external factors" on Fed policy and the economy, he provided a list of five troublesome developments: the UAW strike, a possible government

Ed Yardeni

The Economic Week Ahead: September 25-29

Sep 23, 2023 2 min read paid

This is a relatively slow week for economic data. That means that the markets will be mostly entertained by the talking heads of the Federal Open Mouth Committee. The chattering started on Friday, when two Fed officials (Governor Michelle Bowman and Boston Fed President Susan Collins) endorsed Fed Chair Jerome Powell's remark during his presser on Wednesday: "[W]e're committed to achieving and sustaining a

Ed Yardeni

Bond Yield Climbs to 4.50% As Yield Curve Is Disinverting.

Sep 21, 2023 2 min read paid

The Fed's hawkish pause, announced on Wednesday afternoon, has lifted the 10-year US Treasury yield to 4.50% this evening. We think it might consolidate here for a while consistent with our view that the yield has normalized back to where it was from 2003-2007, i.e., before the Great Financial Crisis (GFC). Back then, the 10-year TIPS yield and the expected inflation spread hovered

Ed Yardeni

Good News Is Bad News, For Now

Sep 21, 2023 2 min read paid

The Fed's hawkish pause has unsettled the bond and stock markets. During 2022 and early 2023, the widespread fear was that the Fed's tightening of monetary policy would send the economy into a recession, depressing corporate earnings and the stock market. Now the fear is that stronger-than-expected economic growth will force the Fed to maintain its restrictive stance for some time. So good news

Ed Yardeni

FOMC's Message: High For Longer

Sep 20, 2023 2 min read paid

The FOMC’s latest Summary of Economic Projections (SEP) released today shows that the median forecast of the federal funds rate (FFR) for 2023 is 5.6%, unchanged from June’s SEP (table). The 2024 forecast was raised to 5.1% from 4.6%. As we expected, the FOMC’s message is that the FFR might be lowered next year by 50bps rather than 100bps. The latest SEP shows headline

Ed Yardeni

Canada's Inflation Spooks Bonds Around the World

Sep 19, 2023 2 min read paid

Canada's CPI inflation rate in August jumped to 4.0% from 3.3% in July on higher gasoline prices. Shelter prices also jumped by 6.0% after a 5.1% advance in July, pushed up in part by rising rents and higher interest rates. The closely watched trimmed-mean CPI rate unexpectedly rebounded to 3.9%, well above expectations of 3.5%. The Canadian 10-year government bond

Ed Yardeni

DEEP DIVE: Inflation: The 1970s Again?

Sep 18, 2023 6 min read paid

US Economy I: Raising Odds of a Recession a Tad On July 31, Debbie and I lowered our odds of a recession. We wrote: “Our script has played out as expected so far. The soft-landing scenario looks increasingly like a no-landing one. As a result, we are raising the odds of a no-landing scenario from 75% to 85% and lowering the odds of a hard-landing scenario

Ed Yardeni

Market Call: September Isn't Over Just Yet

Sep 17, 2023 2 min read

September is usually a nice month weather-wise. After the dog days of summer, the temperature starts to cool with occasional hot spells reminiscent of the summer. On the other hand, the month can be a rough one for stocks. The S&P 500 is down 1.3% mtd so far. That's not so bad. Then again, the month's worst performing sector is Information Technology,

Ed Yardeni

The Economic Week Ahead: September 18-22

Sep 16, 2023 2 min read paid

The Dot Plot thickens! Other than another FOMC meeting, it's a slow week ahead for economic indicators. The committee's statement is widely expected to pass on another rate hike, but suggest that there could be another one at the November meeting. All eyes will be on the Summary of Economic Projections (SEP), which is updated quarterly and includes the "Dot Plot," which shows the

Ed Yardeni

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