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Afternoon Note

Fed Talking Heads

By Charles Payne, CEO & Principal Analyst
1/9/2019 1:32 PM
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The market has been mostly higher today on continued hope for positive news out of China on trade and a shift in market bias. One of the reasons stocks aren’t even higher are the conflicting comments from Federal Reserve officials ahead of the FOMC meetings release. 

The session began with a robust start on comments St. Louis Fed President James Bullard, gave to the Wall Street Journal.  Bullard believes the Fed has gotten ahead of itself, and there is no need to hike rates in 2019.  His fear is more rate hikes could push the U.S. economy into recession. Moreover, he suggested his colleagues have come around to his way of thinking.

It turns out Boston Fed President Eric Rosengren is on board, at least with respect to pausing and waiting on the economy and data to dictate rate decisions. But not everyone is singing from the same hymn sheet. Chicago Fed President Charles Evans thinks there will be three more rate hikes. His comments took the oomph out the rally.  Although he didn’t give a specific timeline for those rate hikes, his neutral rate of 3.25% is well above the median Fed forecast of 2.75%.

All eyes are on the White House, and the shutdown, which isn’t an economic issue but could begin to gnaw at public confidence.  A deal there, coupled with a deal in China could catapult the market through key resistance.

 

 

 

 

 

 

 

 


Comments
The Fed is run by Bankers. How do Bankers make money? Raising rates to curb inflation is a ruse and a self-fulling prophecy - higher interest rates create inflation. Just look at history - e.g, the Carter Administration. I paid 15.7% for a home loan!

Gary Fox on 1/9/2019 1:59:36 PM
I have never witnessed such brazen partisanship from the Democratic Party. They have taken it to a new level. When looking back recently, all those and especially those in leadership supported far greater funding INCLUDING a wall to the tune of tens of billions of dollars. What changed? Only one thing, Trump is President.

Pelosi offered 12 billion for foreign aid but nothing to protect our borders. Unfortunately her promises are about as solid as the ones that Reagan accepted never to be fulfilled. The ONLY way to negotiate with people that do not negotiate in good faith is by strength. We need to remember that compromise is seen as appeasement and weakness from there perspective. Everything is negotiable accept anything offered by our side. The only way to ever get anything on immigration is to hold the line. All truth is not relative as there are some absolutes in life. You may not believe in gravity and that is just a fake theory but if you step off a seven story building you will soon learn that there are some absolutes.

The wonderful part about all of this is that their recalcitrance has gotten them to not participate in anything legislation at all from Trump and the conservatives, so they are not connected in any way with the tax cuts and the booming economy. Wait until taxpayers see the size and scale of their refunds from the tax reduction and it becomes real. More will come to the conservative side from those astonishing results. The only people oblivious to the boom and reality are the Democrats blinded by their partisanship.

Ray Weldon on 1/9/2019 2:11:58 PM
Would it not seem prudent for the Fed presidents to be"swift about hearing and slow about
SPEAKING"?

Sandra on 1/10/2019 11:51:02 AM
I think they need to slow down either way. Losing credibility by the minute, CP

Charles Payne on 1/10/2019 11:53:14 AM
 

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