U.S. stocks rallied for a third day and yields on shorter-maturity Treasuries tumbled after the Federal Reserve struck a dovish tone in its latest policy statement. The dollar weakened against almost all its major peers. The benchmark S&P 500 pushed within striking distance of an all-time high set April 30, led by gains in the […]
Powell’s Press Conference Draws Rave Reviews for Simplicity of the Fed’s Message…
Fed Keeps Interest Rates Steady, Maintains Its ‘Patient’ Policy Stance…
The Federal Reserve announced that it had left its benchmark federal-funds rate unchanged, after its two-day policy meeting concluded May 1. The central bank signaled more patience ahead. Fed policymakers gathered on April 30 and May 1 to assess the economic and financial conditions, and decide on monetary policy. As widely predicted, the central bank […]
OPINION: This Is the Real Reason Why the U.S. Economy Isn’t in Recession Danger Now by Ed Yardeni & Melissa Tagg…
The yield curve is first and foremost predicting the outlook for Fed policy rather than the next recession. My research has confirmed this conclusion, as does a recent Fed study. In my recent book, Predicting the Markets, I wrote: “The Yield Curve Model is based on investors’ expectations of how the Fed will respond to […]
Nomura: “BOOM, Roasted: The Fed’s “Clown Car” Experiment Is Now Complete”…
In the aftermath of the Fed’s second consecutive dovish capitulation, which while framed as a response to the slowing economy (a slowdown which the Fed completely missed as recently as December when 9 FOMC officials expected 1 or more rate hikes and now expect 0) but was really meant to support assets, many have taken […]
“Fed Returns To The Punchbowl”…
Here Are the Biggest Stock Winners on the Day the Fed Went Soft on Interest Rates…
Investors probably weren’t surprised when the Federal Open Market Committee decided not to raise the target federal funds rate on Wednesday, however, a softening of language helped cause a rally for stocks. The Dow Jones Industrial Average DJIA, +1.77% jumped 435 points, or 1.8% to close at 25,014.86, while the S&P 500 index SPX, +1.55% […]
“Patient” Fed Capitulates to Market, Surprises with Unexpected Balance Sheet Unwind Adjustment…
With a 1% probability of a rate-hike today, all that matters is The Fed’s tone (better be uber dovish) and any language shifts on the balance sheet normalization. And, by the looks of things, the now “patient” Fed capitulated to both Trump and the market: “In light of global economic and financial developments and muted […]
Fed Comes A Little Bit Closer To Taylor Rule…
Yes, Jay (Powell) and the Americans (FOMC) came a little bit closer to The Taylor Rule (Rudebusch Model) with the FOMC voting to increase their target rate to 1.75%. The lower bound is now 1.50%. The Taylor Rule (Rudebusch Model) calls for a Fed Funds Target rate of 6.62%. Only 447 basis points left to […]
Stockman: $1.8 Trillion in New Treasury Debt Will Hit Bond Pits “Like a Tornado”…
Investors have been whiplashed so far this week and it’s only Wednesday morning. On Monday, the Dow rocketed ahead by 399 points. On Tuesday, it plunged by 299 points. What changed investor sentiment so dramatically in 24 hours? David Stockman, the former Director of the Office of Management and Budget under President Ronald Reagan who […]