Ed Yardeni

A Dish of Mixed Nuts

Mar 28, 2023 1 min read paid

Today's economic indicators show that the labor market remains tight, while manufacturing activity remains weak. That mix supports our soft-landing scenario with inflation continuing to moderate and the Fed done (or almost done) tightening. Consider the following: (1) Consumer confidence. The labor market remains strong according to the March survey of consumer confidence conducted by the Conference Board. The “jobs hard to get” response remained very low at

Ed Yardeni

A Wave of Bank Mergers Ahead

Mar 27, 2023 2 min read paid

The FDIC started to do its job immediately after it seized Silicon Valley Bank (SVB). The regulator transferred all SVB deposits and assets into a new “bridge bank” to protect depositors of the failed lender. On Monday morning, March 27, the FDIC announced that First Citizens BancShares will buy SVB’s deposits and loans, just over two weeks after the biggest US banking collapse since the global financial crisis. The

Ed Yardeni

Market Call

Mar 26, 2023 2 min read

Bond investors are having fun again. The 10-year US Treasury bond yield peaked last year at 4.25% on October 24. It was down to 3.38% on Friday. Most of this decline occurred since the start of the current banking crisis on March 9 (chart). Bond investors have been waiting for something to break in the financial system since last summer when the yield curve inverted. They are betting

Ed Yardeni

The Economic Week Ahead: March 27-31

Mar 25, 2023 2 min read

More important than any economic indicators this week will be whether there is more bad news indicating that the banking crisis is far from over. No news would be good news. That's what we're rooting for. We are expecting some bad news from the March regional business surveys conducted by the Federal Reserve Banks of Dallas (Mon) and Richmond (Wed), confirming the recessionary readings of the

Ed Yardeni

DEEP DIVE: Artificial Intelligence - Everything Everywhere All At Once

Mar 24, 2023 4 min read paid

The announcements have come fast and furiously. Anyone who has anything to do with AI is broadcasting it to the world loudly. Chip manufacturers, software providers, social media companies, and the average Joe all are talking about how they’re harnessing the power of AI to work faster and smarter. This week’s news has been dominated by Nvidia’s impressive AI offerings unveiled at its software developer conference and

Ed Yardeni

What's On The Fed's Books?

Mar 23, 2023 2 min read paid

The Fed provides a weekly snapshot of its balance sheet in its statistical release H.4.1. It comes out on Thursdays. The latest one for the week ended March 22 can be compared to the one for the week ended March 8 to see how the meltdowns of Silicon Valley Bank and Signature Bank (on March 9 & 10) affected the Fed's balance sheet. The total assets

Ed Yardeni

Can We Bank on Yellen & Powell?

Mar 22, 2023 3 min read

Stock prices fell after Fed Chair Jerome Powell's press conference today, which was actually relatively dovish. He said that inflation remains too high, but the banking crisis might force the Fed to pause tightening soon. Of greater concern to the stock market was that US Treasury Secretary Janet Yellen said at a congressional hearing this afternoon: “I have not considered or discussed anything having to do with blanket

Ed Yardeni

Dr Ed's Video Webcast 3/20/23

Mar 22, 2023 1 min read

The spread between the 10-year Treasury bond yield and the federal funds rate inverted in November; such inversions are predictive of credit crunches and recessions. They also tend to predict financial crises that halt Fed tightening. It’s too early to credit the yield-curve inversion for calling a recession, but it was spot on in presaging a crisis like SVB. Below is exclusive early access to Dr Ed's

Ed Yardeni

Fed Hawks Down!

Mar 22, 2023 1 min read

The FOMC raised the federal funds rate by 25bps to 4.75%-5.00%. The committee's statement reassuringly noted: "The U.S. banking system is sound and resilient." Nevertheless, the recent banking crisis undoubtedly turned Fed officials less hawkish. Fed Chair Jerome Powell in his post-meeting presser said that inflation remains too high, yet the median forecast of the federal funds rate in the FOMC'

Ed Yardeni

The Fed Has Done Enough

Mar 21, 2023 2 min read

The banking crisis might be equivalent to a 100bps hike in the federal funds rate. We are just guessing, but financial conditions have surely tightened a lot as a result of the SVB earthquake and its aftershocks. Further hikes in the federal funds rate are no longer necessary to get it into restrictive territory as Fed officials have been aiming to do since they started the latest monetary policy tightening

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

MegaCap-8 Stocks Are Outperforming Again

Mar 19, 2023 1 min read paid

The MegaCap-8 stocks seem to do well during pandemics. They did so in 2020 during the Covid lockdowns. They may be doing so again during the banking crisis. Their collective market-cap share has jumped from 19.0% a few weeks ago to 23.5% on Friday (chart).

Ed Yardeni

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