JPow, The Fed, And Final Comments -- February 1, 2023

Laser-Focused on Dividends

I couldn't possibly be happier.

About a year ago, I actually put together a real investment plan and an element of that investment plan included a focus on dividends. 

My annual dividends have increased 24% year/year. 

Lots of taxes but lots of cash flow.

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Parting Shots

Three things: GDPNow, "disinflation," and, JPow's disposition today.

JPow today: seemed really, really comfortable today. One had the feeling that whether things work out or don't work out, we at least have one adult in Washington. 

Disinflation: link here.

Although they may sound the same, deflation should not be confused with disinflation.

Deflation is a decrease in general price levels throughout an economy, while disinflation is what happens when price inflation slows down temporarily.

Deflation, which is the opposite of inflation, is mainly caused by shifts in supply and demand.

Disinflation, on the other hand, shows the rate of change of inflation over time. The inflation rate is declining over time, but it remains positive.

Deflation: bad. Disinflation: good.

GDPNow: link here.  

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Earlier Post

Re-posting. Posted earlier today:

Most folks did not hear JPow using this word, but he used it more than once. 

Fed rate:

• up twice more this year unless things get appreciably worse;
• 25 bp today and 25 bp twice more this year
• Americans have gotten use to current Fed rate
• current Fed rate is the new floor for the foreseeable future
• which means: that another 75 bp increase by end of year is a non-event
• so many opportunities to be hawkish -- and never took the bait
• 25 bp in March and then pause and / or one more 25 bp before summer

Jobs:

• finally seeing some clearing of the "fog" regarding jobs
• all good news
• analysts spent too much time on jobs
• JPow seemed much less concerned about jobs
  

Covid-19:

• it's over; get over it

JPow:

• seems comfortable
• no longer angry

The only worry:

• GOP delays raising the debt ceiling
• the debt ceiling will be raised but the concern is if the government defaults for even one hour -- the message that would send

Dow:

• down as much as 300 points before JPow spoke
• now, Dow is up almost 100 points
• technology stocks leading
  
• NASDAQ positive more than 2%
• investors seem "more with it" than the analysts
• ignore the analysts; watch the market
• US dollar "sinking" -- in the current environment -- good to see