Chris Rupkey
Chris Rupkey
action fed gone looking market moves though
Expectations of Fed action have gone though the roof. The market is looking for two 25-basis-point moves and one 50-basis-point move before the presidential election.
close commodity economy hikes june members minutes past prices rate series since sounds stale until
While it sounds as if most members see that the series of rate hikes since June 2004 is close to the end, it's not over until the economy slows. The minutes are a little past their stale date. Commodity prices are soaring.
credit due
We were due for a pullback in credit,
fed officials point suggest
There is nothing at this point to suggest that Fed officials will pause.
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The red ink was a one-month record in February, and the records are likely to continue to be broken this year. The spending side of the budget ledger remains out of control, despite some effort to constrain these expenditures.
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Business capital spending is coming on strong and the timing of these equipment purchases could not be better. Business spending will take up the slack as the housing slowdown cools consumers' appetites.
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There is considerable momentum here that will not be easily slowed. This economy is strong, and it is likely to surprise on the upside.
country entire production running
Manufacturing production in the entire country is running flat-out at the moment.
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Growth isn't fast enough that the Fed has to brake the economy, and at the same time it isn't slow enough that the Fed can stop and watch. Inflation pressures can still gain a foothold as the economy continues to take up slack resources.
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Unfortunately, I think they tried to fight the inflation dragon a little too long, and rejected the counsel of the markets which urged them to cut rates as early as November that year.
added boost changed cut december expecting federal funds limit low rate saying stock thinking today
We're back to expecting a rate cut on December 11. Meyer changed people's thinking by essentially saying there's no limit as to how low (the federal funds rate) could go and today we're getting an added boost from the (weak) stock trade.
decided path people prices resistance selling
The selling abated, prices stabilized and people decided the path of least resistance is up.
buyers days eager evidence expected fresh homes lock market mortgage rates taking trend
Buyers may be eager to lock in rates now as mortgage rates are expected to trend higher. Many homes go on the market in the first days of spring, and this is the first real evidence that buyers are taking a fresh look at the market.
bit cause consistent early environment increase inflation lay momentum pressures rate resources slack sort spill taken
This is consistent with the idea that slack resources have been taken up in the economy. There is considerable momentum and this is the sort of environment where inflation pressures can spill over and actually cause an increase in the rate of inflation, so it is a bit early for them (the Fed) to lay down their saber.