Ed Yardeni

Market Call: The Fed Put Is Back

Mar 24, 2024 2 min read paid

Last week, the FOMC released its latest quarterly Summary of Economic Projections (SEP) for March. Compared to December's SEP, the committee's participants raised their 2024 median forecasts for real GDP (from 1.4% to 2.1%) and for the core PCED inflation rate (from 2.4% to 2.6%). Their median forecast for the unemployment rate was lowered a bit from 4.1% to 4.0%

Ed Yardeni

The Economic Week Ahead: March 25 - 29

Mar 24, 2024 2 min read paid

The most important economic indicator for the week ahead will be February's PCED inflation rate, which comes out on Friday. The Cleveland Fed's Inflation Nowcast shows the headline and core rates rising 0.4% and 0.3% m/m, and 2.5% and 2.8% y/y. Those results would be about the same as January's, possibly raising concerns that inflation has stalled and

Ed Yardeni

DEEP DIVE: The Fed In A Presidential Election Year

Mar 23, 2024 3 min read paid

Notwithstanding last week’s hotter-than-expected CPI and PPI reports, the financial markets are still anticipating that the Federal Reserve will cut the federal funds rate three times over the next 12 months. On Friday, the nearby federal funds rate futures was 5.33%, while the 12-month futures was 4.47% (Fig. 1 below). That 86-basis-point spread implies that investors expect at least three cuts of 25 basis points each by

Ed Yardeni

Moon Shot

Mar 21, 2024 2 min read paid

The S&P 500 rose to yet another record high today closing at 5241.53 (chart). We wrote the following last year on July 19 in our Morning Briefing: "The S&P 500 is now almost at [our yearend target of] 4600. It closed at 4556.27 on Tuesday. Rather than raise our year-end target, we are raising our expectations for what the bull market could deliver

Ed Yardeni

Powell & Co. Remain Dovish

Mar 20, 2024 3 min read

Powell & Co. were more dovish today than we (and stock investors) expected. The FOMC's Summary of Economic Projections (SEP) still implied three 25bps cuts in the federal funds rate (FFR) this year (table). That's the same projection as in December's SEP even though the median forecast was raised for real GDP growth (to 2.1% from 1.4%) and the core PCE inflation

Ed Yardeni

Dr Ed's Video Webcast 3/20/24

Mar 20, 2024 1 min read paid

Unlike in January, investors’ rate-cut expectations now appear to be in sync with FOMC members’ projections. Both seem to be anticipating two or three 25-basis-point cuts over the coming months. … Whether the apolitical Fed might time its rate cuts with any consideration for election-year politics is unclear, but we list some political considerations that it might be weighing if so. … Also: We explain the theoretical framework we use to forecast

Ed Yardeni

Stock Market Has Discounted Lots Of Good News

Mar 19, 2024 2 min read paid

Nvidia was up a measly 1% today despite the exciting presentation, after Monday's close, by CEO Jensen Huang about the company's future in the AI ecosystem. He announced a new generation of GPU chips and software for running AI models. The first chips in the new Blackwell platform will be shipped later this year. They are more powerful (with a five-fold increase in petaflops) and consume

Ed Yardeni

The S&P 500/400/600 Performance Derby

Mar 18, 2024 2 min read paid

The S&P 500 LargeCap stock price index is up 44.0% since the end of the latest bear market on October 12, 2022. The S&P 400 MidCap and S&P 600 SmallCap are up 29.5% and 17.8% since then. The S&P 500 and S&P 400 are trading at record highs, while the S&P 600 remains below its

Ed Yardeni

The Economic Week Ahead: March 18 - 22

Mar 17, 2024 2 min read

Other than Nvidia's AI lovefest during the first three days of the week and the FOMC meeting on Tuesday and Wednesday, it's a quiet week for economic indicators. It will be interesting to see if the Philly Fed's regional business survey (Thu) for March confirms the weakness in last week's similar survey released by the NY Fed (chart). Both of these regional

Ed Yardeni

Market Call: Nvidia's Lovefest Versus Powell's (Perhaps Depressing) Presser

Mar 17, 2024 2 min read paid

Nvidia's three-day AI lovefest for developers starts Monday afternoon in San Jose, California. The FOMC meets Tuesday and Wednesday followed by Fed Chair Jerome Powell's press conference at 2:30 pm following the meeting. During his congressional testimony on March 7, Powell indicated that the Fed "is not far from...dial[ing] back the level of restriction." After last week's hotter than

Ed Yardeni

DEEP DIVE: 'Pent-Up Exuberance'

Mar 15, 2024 4 min read paid

Raphael Bostic is the president and CEO of the Federal Reserve Bank of Atlanta. He is a 2024 voting member of the Federal Open Market Committee. In a March 4 post on his bank’s website, he warned about “pent-up exuberance.” He acknowledged that inflation has slowed, but he fears that it could accelerate quickly if the Fed stops tapping on the economy’s brakes and begins to step on

Ed Yardeni

The Pause That Refreshes Spooks Investors

Mar 14, 2024 2 min read paid

The vertical momentum rally that started on October 27, 2023 seems to be losing some of its momentum. Maybe. That's OK with us. We would rather see our 5400 S&P 500 target achieved by yearend, then by mid-year. But as the Rolling Stones observed, "You can't always get what you want." Slowing the pace of the advance this week have been hotter

Ed Yardeni

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