E Market Briefing For Thursday, Sept. 23

Decoupling 'tapering' from rate 'hikes' was the preferred path presumed by probably everybody, and that's what we got. GDP forecasts were lowered by the Fed, which infers lack of "feistyness", along with expectation for growth.

Lime, Drink, Glass, Club Soda, Cocktail


Sort of 'soon' (perhaps November) the Fed begins tapering, they may already slightly reduce their MBS (mortgaged-backed securities) purchasing patterns. Moving a rate hike idea into 2022 rather than 2023 is seen as sort of 'hawkish' but as I discussed last night, aside brief jitters that's favorable as helps avoid the bear's desired (and dreaded by others) calamitous debt catastrophe. 

So, speaking of dodging a catastrophe, this is an illustration, but check it out. In a couple years we'll finally have a space telescope that would detect this well in-advance. Again this was closer to Earth than our Moon just last week.

Possibly you expected a Fed-related chart? Hah, not much new to show, and continuity and stability is the name of the game as they try threading needles.

Doubtless it's already a dangerous debt environment, just saying it would be a good bit more threatening if they keep this game going much longer. Hence a perceived tilt to hawkishness is actually more bullish than being dovish. There is no impediment to business from slightly higher rates, so it isn't such a worry as seems to be troubling others. I've said before: firm rates here are a plus. Of course that changes if it's because of Chinese or similar massive liquidation.

So, the take-home message from the FOMC: dot-plots' have firmed-up short maturities, and rates eventually will move-up. Inflation is still foggy long-term, but for now remains enduring not transitory as I have believed all along. Down the road there will be a big readjustment, just not now, and the Fed obviously is aware of the bigger-picture risks as well.

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This is an excerpt from Gene Inger's Daily Briefing, which typically includes one or two videos as well as more charts and analyses. You can subscribe for  more

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Mitch Reynolds 4 weeks ago Member's comment

Great read, thanks Gene.

Gene Inger 4 weeks ago Author's comment

Thanks for the kind words; when I grow up I'll get more concise :). Although not discussed in these excerpts our new pick of AEHR Test Systems went insane... we're in at 5-6 and it's near 14 in just 3 weeks. Yes we're holding. And our LPTH at 2 is looking interesting; SRNE is a laggard but of course could double on a dime if FDA approves the antigen test. (Hope that helps; welcome any of you guys & gals as actual subscribers.)