Federal Reserve raised the interest rate by 50 basis points to 4-1/4 to 4-1/2 percent given the stubbornly high Inflation, lower unemployment, and broad price pressure due to supply imbalance between aggregate demand and supply.   Recent employment and inflation data have zigged and zagged in many directions this year. In some months, data came …

Fed raised the rates by 50 basis points; how high the fed rate could go? Read More »

Inflation cooled more than expected in November, raising hope that the Federal Reserve will be able to ease back on the series of aggressive interest-rate increases it has rolled out this year as it seeks to get prices under control. The consumer price index climbed at a 7.1% annual pace in November, down from October’s …

Taming Inflation Read More »

The spread between 10-year and three-month bonds is in negative territory, implying financial institutions have less incentive to extend loans to borrowers. The latest data from the conference board suggests the leading economic indicators are dropping. We hear the big “R” word (recession) often by the corporate leaders in the quarterly meetings. Global firms are …

Let us not sugarcoat it. Read More »

AAII sentiment indicator shows pessimism at 60%. Sentiment describes a group of people’s opinions, emotions, or views. In investing, sentiment can be a powerful determinant of security prices, especially in the short run. Emotions—whether rational or irrational—can drive market prices. The price at which an individual security trades is the total sentiment of all market …

Investor Sentiment as a Contrarian Indicator. Read More »

With inflation at multi-decade highs in many countries and pressures broadening beyond food and energy prices, policymakers have pivoted toward tighter policy. The monetary policy cycle is now increasingly synchronized around the world. Notably, the pace of tightening is accelerating in several countries, particularly in advanced economies, in terms of both frequency and magnitude of …

Global Central Banks Following the Fed’s Path. Read More »

Officials project short-term rates will rise above 4.25% by year’s end, signaling further large increases at future meetings. The Federal Reserve approved its third consecutive interest-rate rise of 0.75 percentage points. It signaled significant additional increases were likely at future meetings as it combats inflation that remains near a 40-year high. The decision Wednesday, unanimously supported by the Fed’s 12-member …

Fed Raises Interest Rates by 0.75 Percentage Point. Read More »

Given the decline in GDP for the second quarter, more S&P 500 companies than typically discussed the term “recession” during their earnings conference call for the second quarter.   240 companies cited the term “recession,” and 412 companies cited “inflation” during their earnings calls for the second quarter From June 15 through September 8, which …

Highest number of S&P 500 companies citing “Recession” on Q2 earnings calls in over 10 years. Read More »

The Consumer Price Index for All Urban Consumers rose 0.1 percent in August on a seasonally adjusted basis. Over the last 12 months, the all-items index increased 8.3 percent before seasonal adjustment. On a year-over-year basis, food prices went up 11.4%, energy prices by 23.8%, new vehicles by 10.1%, and transportation costs by 11.3%. On …

Untamed Inflation warrants rate hikes. Read More »

Most people assume they can work longer but end up retiring earlier. There could be multiple reasons, including health and unforeseen circumstances like COVID. It is wise to delay our gratification and save and invest while we are young and working. In a recent survey by EBRI, only 10 percent of the workers planned to …

A bird in the hand is worth two in the bush. Read More »

If history is the guide, in March 1980, inflation peaked at 14.6%, and Fed raised rates to 19.1% to bring back inflation to the neutral rate in June 1981. And, if the Core inflation is at 9%, is a 2.5% Fed rate enough to tame the beast? In our opinion, Markets misread the Fed statement …

Fools Rush In Read More »