Inflation is on the Wane

Why the Fed is Still So Hawkish The evidence on inflation is quite clear; it peaked in June and is now on the wane. The latest data came from the Producer Price Index (PPI) which rose only 0.2% in October (consensus was +0.4%). This is a monthly level the Fed could live with (2.4% annual […]

Employment Report – Not What Meets the Eye

Fed Near End of Rate Hikes The big news today was that payrolls increased by +261K. This caused markets to rally (shoot first, ask questions later). Interest rates moved up because the headline +261K may cause the Fed to be even more hawkish. Nevertheless, beneath the veneer, this was a very weak employment report. There […]

Tamer Inflation

But Trouble Lies Ahead as Fed Has Overtightened As we go to press, the Fed has called an Emergency Meeting for Monday, October 3. The official reason is a “Review and determination by the Board of Governors of the advance and discount rates to be charged by the Federal Reserve Banks.” Our view is that […]

Fed Transparency = Market Volatility

Markets have tanked since the worse-than-expected CPI reading, and the latest Fed hawkishness means no Powell “pivot,” no Fed “Put,” and no soft-landing. The table shows the market peak for the four major indexes, the level and percentage changes at the market’s trough at June’s end, the levels and percentage changes from the top of […]

Why Bonds Now Belong

Jim Cramer of CNBC has a saying: “There’s always a bull market somewhere.  My job is to help you find it!”  Rule #5 of Bob Farrell’s famous 10 Rules for Investing states: “The Public Buys the Most at the Top and the Least at the Bottom.”  His Rule #9 says: “When All the Experts Agree, […]

Why Interest Rates Are Falling

#*!? CRASH BAM @#$ Suddenly, markets (well, at least the bond market) now see falling interest rates in the short and intermediate term. The 10-Year U.S. T-Note fell from 1.47% on June 30 to close at 1.29% on Thursday July 7 (a big move in just four market sessions). Some of the rapid fall was due to […]