Federal Reserve Hikes Key Rate, Ups Economic Outlook - March 26, 2018

To no one’s surprise, the Federal Reserve lifted the fed funds rate by 0.25 percentage points to 1.50 – 1.75% following the conclusion of last Wednesday’s meeting (Fed press release). It’s the sixth time the Fed has boosted the key rate by 0.25 percentage points since its first rate hike in December 2015 (St. Louis Federal Reserve).

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It’s Fed Time - March 21, 2018

The Federal Reserve concludes its two-day meeting on Wednesday.

  • A 0.25 percentage point rate hike in the fed funds rate to 1.50-1.75% is widely expected.

With a rate increase already discounted by investors, what is the meeting’s significance? How the Fed frames its outlook will be closely followed.

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A Q1 Speedbump - March 19, 2018

Today, you’re more likely to hear stories about solid economic growth rather than yesteryear’s anemic economic recovery. In prepared remarks before a Congressional committee late last month, Fed Chief Jerome Powell said he wanted to avoid an “overheated economy.” An overheated economy? That’s a term we haven’t heard in quite a long time.

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You're Hired - March 14, 2018

The economy generated 313,000 net news jobs in February, well above the consensus of 205,000 (Bloomberg).

  • Average monthly increase over last four months has been 236,000, the fastest pace since September 2016 (U.S. BLS).

Manufacturing has been sharing in the good fortune.

  • Average monthly increase over the last four months has been 31,000, the fastest pace since early 2012 and the second-best reading since the recovery began in 2009 (U.S. BLS).

  • Fly in the ointment – newly imposed tariffs will likely dent hiring in manufacturing over the medium term.

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Nine Candles on the Birthday Cake - March 12, 2018

On March 9, 2009, the S&P 500 Index closed at 676.53, the low of the cycle (St. Louis Federal Reserve). It was an unpleasant time, as the economy was in the midst of its worst recession since the 1930s. If bull markets are berthed in pessimism, this one fits the bill. On March 9, 2018, the S&P 500 Index closed at 2,786.57 (MarketWatch). The bull market is nine years old.

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