The Fed will hold its two day meeting and Jerome Powell the Fed Chairman will give a speech summarizing what was discussed.
There is not expectation of a Fed rate increase but many will be hanging on every word to gleam some indication of what might come in February.
The markets are trading Treasuries below the Fed funds rate.
This is based on the widespread belief that the Fed will substantially reduce rates this year with up to 6 rate cuts.
I find this a bit optimistic on their part. Much of this has been based on these same people projecting a recession which has yet to come and looks less likely.
The track record so far on their prognostications is pathetic.
I must take myself to task, as I have stated here that the Fed designing a soft landing was highly unlikely as they had never done it before.
The jury is still out, but it looks pretty smooth right now.
There is much that can upset this rosy scenario.
I do not think it is the economy as each and every measure shows GDP coming in at or around 3%.
That is not a raging success but it certainly isn’t a recession.
Inflation has come down to 3%.
Those are stabilizing factors. On the other side is the turmoil in the Middle East that is just getting worse by the day.
It seems imminent that we will have to confront Iran now that US soldiers have been killed an injured.
The closing of the Red Sea for shipping is a small point by that time.
Crude prices could be substantially impacted I would mention problems with China and Russia, not to forget Ukraine.
In all actuality, it is just a regular day in this complex world. Just playing the Devil's Advocate here.
On a more fundamental note 5 of the Magnificent & will have earnings reports this week and we all know who is driving this ship.
The S&P 500 stock-index has climbed within striking distance of 4900 and there are projections by some that the index will climb to 5400 this year.
There is not arguing the importance of these 7 stocks.
I shudder to think how far we will fall back should this group hit a bump in the road.
I don’t see it being a recession but some other event that just puts a damper on earnings.
One would be betting against the odds that such an event would happen however.
There are other things such as the ever increasing national debt an election coming that will have an impacts later this year.
It just has been a bad period for projections by so called experts.
I am invested but it gets harder each day to find something new and different.
I try not to just take the simple route of buying treasuries but that 5% yield is tough to ignore.
Maybe the Fed will take that away but I for one seriously doubt such will be the case.
I don’t see the warning lights flashing as we are getting close to touching down.
It Will Be A Week Of Fed Watching And Earnings Evaluations.
