Updates
Later, 12:15 p.m. CT: just a couple of hours after posting the note below, this note from CNBC --
- The economic expansion that began post-financial crisis is nearing the 10-year mark, matching the longest in history
- It is troubling times at the Federal Reserve, with President Trump's public bashing of Fed chairman Jerome Powell preceding a reversal in Fed policy on interest rates hikes -- and why is it "troubling" ? -- LOL
- The economy is doing well, and inflation is under control, but if the economy slows the Fed will have few tools left to fend off a recession, or could even help cause one through drastic rate hikes -- yup -- exactly what Trump has been saying for months ...
- In just over a month, the U.S. economy will complete 10 years of economic expansion, matching the longest expansion in history.
- The last time this happened, in March 2001, the economy slid from its lofty peak and into recession. The unemployment rate in the months preceding that recession dipped to 3.9 percent, nearly identical to the current rate.
- Yup, I guess the unemployment rate is the new metric -- LOL
Original Post
This is probably as exciting as it's ever been for investors. We're coming up on "May: sell, and go away."
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US economy humming right along. See top stories for this past week. Top national non-energy story: American economy:
Several months ago, "everyone" was talking about additional "rate hikes" and suggesting President Trump was out of line for calling out the "Fed" for raising rates too soon, too fast. Regular readers know how I feel about that.
About the same time "everyone" was talking about additional "rate hikes" I started suggested just the opposite. Rate hikes stopped, and now there is talk of at least one rate cut this year. From The Wall Street Journal this past week:
Fed officials contemplate thresholds for rate cuts. A cut isn't imminent, but interviews, public remarks suggest Fed officials are talking about the conditions that might lead to such an action.
Inflation rose last year to the Fed’s 2% target after years of undershooting it. Central bank officials say the target is symmetric, meaning they expect inflation will drift mildly above and below it at different times.
Price pressures softened beginning last fall, although officials had expected inflation to keep rising amid strong hiring and a burst of fiscal stimulus fueled by tax cuts and government spending.
If inflation runs too far below 2% for a while, it would show “our setting of monetary policy is actually restrictive, and we need to make an adjustment down in the funds rate,” Chicago Fed President Charles Evans said Monday, referring to the central bank’s benchmark federal-funds rate.
Mr. Evans said his forecast was for inflation to rise over the coming year, justifying a rate increase in late 2020 and possibly again in 2021 to keep price pressures under control.
