Fed

Moon Shot?

Nov 30, 2022 2 min read

Fed Chair Jerome Powell was a bit less hawkish today. He said he still thinks there is a "path to a soft or softish" landing for the economy. He also suggested that the next hike in the federal funds rate on December 14 is likely to be 50bps rather than 75bps. So stock prices exploded to the upside. The DJIA soared more than 735 points, or 2.2%

Ed Yardeni

Risk Off In Last Week's Performance Derby

Nov 19, 2022 1 min read paid

The S&P 500 went nowhere fast last week, dropping 0.7% to 3965, putting it in between its 200-day moving average of 4053 and its 50-dma of 3790 (chart and table). Hanging over the market is that investors seem to be hanging on to every word of the participants of the FOMC (a.k.a., the "Federal Open Mouth Committee"). The economy is doing relatively well,

Ed Yardeni

On A Wing & A Prayer

Nov 17, 2022 2 min read paid

Ed Yardeni

PMI Prices-Paid Indexes Predicting Falling Inflation

Nov 5, 2022 1 min read

Rapidly rising inflation since early last year has forced the Fed to raise interest rates significantly this year. That's been bad news for stock and bond investors, particularly this year. From the end of the Great Financial Crisis through the end of the Great Virus Crisis (i.e., 2009-2021), the winning investment strategy was to own both assets. Investors' mantra was: "Don't fight the

Ed Yardeni

Powell's Hawkishness Boosts Bearishness

Nov 3, 2022 1 min read paid Featured

Fed Chair Jerome Powell's press conference might have signaled his latest pivot, but this time it might be to his peak hawkishness. He said that the Fed will raise interest rates until there is convincing signs that inflation is abating, which hasn't happened so far. There will be no pause along the way and certainly no easing. The terminal federal funds rate in December's

Ed Yardeni

Powell Turns Even More Hawkish

Nov 2, 2022 2 min read Featured

During his press conference today, Fed Chair Jerome Powell continued to read from the Volcker 2.0 script. His punchline appeared in his prepared remarks: “[W]e still have some ways to go, and incoming data since our last meeting suggest that the ultimate level of interest rates will be higher than previously expected.” During the Q&A portion of his presser, Powell repeated “some ways to go” several

Ed Yardeni

What Will Powell Say?

Nov 1, 2022 2 min read paid

Tomorrow afternoon, the FOMC is widely expected to increase the federal funds rate by 75bps to a range of 3.75%-4.00%. There is much less certainty about what Fed Chair Jerome Powell will say at his press conference at 2:30 p.m. after the meeting. The bulls, including yours truly, are hoping to hear that after another rate hike of 75bps next month to 4.50%-4.

Ed Yardeni

The Economic Week Ahead, October 31-November 4

Oct 29, 2022 1 min read Featured

It's yet another Fed week. On Wednesday, the FOMC is expected to announce another 75bps hike to a range of 3.75%-4.00%. That would make the fourth consecutive hike of that magnitude. Fed Chair Powell will have to acknowledge that the federal funds rate is now further into restrictive territory and will be even more so come the FOMC’s December meeting, when the rate is

Ed Yardeni

Stocks Float As 2-Year Yield & Dollar Sink

Oct 26, 2022 1 min read paid

The S&P 500 bottomed this morning around 10 a.m. about 1% below yesterday's close on earnings misses by Alphabet and Microsoft. But it quickly popped back up to the surface, so it now is floating slightly above yesterday's close as of 11 a.m. The trading day isn't over, but there is an interesting dynamic playing out in the markets: (1)

Ed Yardeni

MegaCaps, ECB & ECI

Oct 25, 2022 1 min read

History shows that the Santa Claus rally usually starts during October. This year, the S&P 500 had a terrible September, falling 9.3%. Since the end of that month through today's close, the index is up 7.6%. It could be tough sledding for Santa over the rest of this week. After the close, Google missed earnings as YouTube's ad revenue disappointed. In addition,

Ed Yardeni

Fed May Be Dialing Back On Hawkish Squawking

Oct 22, 2022 2 min read

The S&P 500 rallied 2.37% to 3,752.75 on Friday as the 2-year US Treasury note yield fell to 4.50% from 4.61% on Thursday (chart). The happy day's performance was sparked by Friday's WSJ article titled "Fed Set to Raise Rates by 0.75 Point and Debate Size of Future Hikes." It was written by the Journal'

Ed Yardeni

S&P 500: Why Today's Sizzle?

Oct 17, 2022 2 min read

The S&P 500 sizzled last week on Thursday. It fizzled on Friday. Why is it sizzling again today? On Friday, Reuters interviewed St. Louis Fed President James Bullard. As we observed in today's Morning Briefing, Bullard said that he favors “frontloading” hikes in the FFR, with a wait-and-see stance on 2023. In other words, he suggested that the Fed should go ahead with the widely expected

Ed Yardeni

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