Trump Delivered a Brutal Line to Heckling Libertarians
Chris Sununu: Governors Get Along Except Everyone Hates These Two
This Part of Biden's 2024 Online Strategy Is Going to Fail Miserably
U.S. Reps Show Support for Taiwan in Surprise Visit Defying CCP Warnings
Democrats Are Getting Desperate
Is the Washington Post Helping Trump?
Here's the Video of Biden CBS’s Margaret Brennan Thought Was a Deepfake
Hillary Clinton Can't Just Accept the Fact She Lost In 2016 Because Trump...
Joe Biden Plans to Address Trump's 'Hush Money' Verdict In a WH Presser
Over 40 Mayors Beg Joe Biden to Create Jobs Program for Illegal Immigrants
Durbin, Whitehouse Seek Meeting With Chief Justice Roberts As They Continue to Attack...
Trumps Makes Surprising Remarks About Nikki Haley
Six Reasons to Vote in Elections
UNRWA Is the Poster Child for Why America Should Leave the U.N.
Our Institutions Are Burning Themselves Down
OPINION

What The Fed Sees That No One Else Sees

The opinions expressed by columnists are their own and do not necessarily represent the views of Townhall.com.
Advertisement
Advertisement
Advertisement

Last Friday, the market took it on the chin in a manner that was not represented in the close of major indices. Sure, the Dow was down 1.3% and it shed 7% this year already, even the tech-laden NASDAQ, which suffered a 3% drubbing has been slammed almost 13% this year, but it doesn’t accurately reflect the carnage.

Advertisement

Those hot stocks (known as the FANG trade) have been bitten, reminding investors that the momentum pendulum swings both ways.

Of course, this all got started with the jobs report, which I thought was the best possible outcome for a nervous market. Overall, we saw a tepid job growth that will be revised lower, along with stronger wages to mitigate recession arguments. However, the twelve-cent increase in wages has many economists saying that the Fed will hike rates in March.

I say that it’s nuts. Sure, inflation 101 says inflation happens from too much money chasing too few goods- is there anyone out there with too much money.

Still, there are new voting members on the Fed; two have spoken out this week, burnishing their reputations as hawks and straight shooters. First, Esther George says Wall Street needs to “man-up” and to take these rate hikes, followed by Loretta Mester, who says that Fed policy doesn’t mirror the market and essentially says that the tail will not wag the dog.

Advertisement

We are still off the double bottom formation and can still rally. Your key numbers next week are 16,500 on the upside and 15,750 on the downside. Look for more gyrations, but stick with the weak dollar investment strategy.

There are more earnings reports and economic data releases scheduled for the week, but it’s anti-climactic. From here on out; each time a Federal Open Market Committee (FOMC) voting member opens their mouth, it will dictate the direction of the stock market. While those academics try to sell the idea that this is an economy so hot that it needs cooling off, the rest of us will be looking for signs of economic life.

Join the conversation as a VIP Member

Recommended

Trending on Townhall Videos