Below are some of the most interesting articles, quotes and charts I came across this week. Click here to subscribe to our free weekly newsletter and get this post delivered to your inbox each Saturday morning.
Jerome Powell officially executed another one of his famous “pivots” this week.
'It seems that the Fed has at last executed its much discussed "pivot" toward easier money.' https://t.co/UfL9Heqcne by @johnauthers pic.twitter.com/F4ndJnePDv
— Jesse Felder (@jessefelder) December 14, 2023
This, despite the fact that there are some indications inflation may be reaccelerating.
🇺🇸 So the Fed is OK with the largest rate cuts ever discounted over the coming 18 months, despite small business price plus compensation plans high and rising. And median/sticky CPI accelerating the past three months. Didn't see that one coming… pic.twitter.com/5CLU7ApuB7
— Mikael Sarwe (@MikaelSarwe) December 14, 2023
Perhaps the Fed simply has bigger things to worry about than bringing inflation sustainably back to its 2% target.
"The vigilantes will be back," @yardeni said in an interview. "This is not an issue that will go away unless it's fixed. If anything, the deficit outlook is probably worse than is being anticipated." https://t.co/yfNUOe0tEM pic.twitter.com/Rh6lYQZ3iX
— Jesse Felder (@jessefelder) December 13, 2023
Still, investors cheered the shift in the central bank’s monetary posture.
Retail traders are all-in again.
Dumb Money Confidence just jumped to the 3rd-highest reading in 25 years.
It was no problem at all in 2021. Other than that, very high Confidence typically precedes modest gains at best until sentiment resets. pic.twitter.com/MEL2DYgJ2W
— Jason Goepfert (@jasongoepfert) December 15, 2023
But there are reasons to believe the celebration may be premature.
'The chart below shows previous instances when the S&P 500 has been at least 7% above its 40-week average, and at least 4.5% above its 10-week average, as it is presently, with our gauge of market internals still unfavorable.' https://t.co/AZKa4JiOhN by @hussmanjp pic.twitter.com/UIMI54seJU
— Jesse Felder (@jessefelder) December 15, 2023
Thanks for reading and have a great weekend!
