The Iceman Goeth, Robots Cometh – Ep. 229

  • The Dow finished with yet another gain today
  • We closed at 20,775.60
  • I’ve been told that this is the longest consecutive winning streak for the Dow Jones since 1987
  • Of course, we all remember how that streak came to a crashing end in October with the 1987 stock market crash
  • We’ll see if the market has better luck this time around
  • We got the FOMC minutes released earlier today
  • I think they were interpreted as being hawkish; remember, this is all on a relative scale, they’re all doves now
  • It is simply degrees of dovishness, there are no actual hawks on the FOMC or on any central bank
  • The question is, “Who is more dovish and how dovish can you be?”
  • But there were some statements that caused the markets to think, “Hey, maybe a rate hike is coming.”
  • Because I think the members said it would be appropriate to raise rates sometime soon
  • What is sometime soon?
  • Is that March, or is that April, May or June?
  • That’s still soon, in the scheme of things
  • If you look at how slowly the Fed has been moving
  • Glacial speed, when it comes to raising rates
  • Soon can certainly be a few months from now
  • It doesn’t necessarily mean that it is going to be March
  • They could have said March – “It might be appropriate to raise rates in March”
  • They didn’t say March – they just said soon
  • Nobody really knows what soon is
  • They did comment that they thought the markets might interpret gradual rate increases as meaning only 1 or 2 rate hikes a year
  • And they were troubled by that, because maybe by saying that, by gradual, they mean 3 a year
  • Not 1 or 2
  • I heard some people saying,
  • “Maybe the Fed is not going to go slowly.”
  • Even if they do 3 – we’re still talking very gradual rate hikes, especially if you put it in context of how low rates are right now and how high inflation is already
  • I keep hearing these comments from Fed officials
  • They’re doing interviews and they’re saying, “Yes, we’re making progress; we’re moving slowly toward our goal of 2% inflation.”
  • 2% inflation!  They left that in the dust
  •  The last number we got in January showed a year over year increase of 2.5%
  • So why are they saying they’re making progress toward getting to 2% when they’ve already zoomed past it
  • They’re looking at it now in the rear view mirror