• 396 days Will The ECB Continue To Hike Rates?
  • 396 days Forbes: Aramco Remains Largest Company In The Middle East
  • 398 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 798 days Could Crypto Overtake Traditional Investment?
  • 803 days Americans Still Quitting Jobs At Record Pace
  • 805 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 808 days Is The Dollar Too Strong?
  • 808 days Big Tech Disappoints Investors on Earnings Calls
  • 809 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 811 days China Is Quietly Trying To Distance Itself From Russia
  • 811 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 815 days Crypto Investors Won Big In 2021
  • 815 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 816 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 818 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 819 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 822 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 823 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 823 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 825 days Are NFTs About To Take Over Gaming?
Zombie Foreclosures On The Rise In The U.S.

Zombie Foreclosures On The Rise In The U.S.

During the quarter there were…

Another Retail Giant Bites The Dust

Another Retail Giant Bites The Dust

Forever 21 filed for Chapter…

What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

  1. Home
  2. Markets
  3. Other

Will The Fed Spook The Markets In September?

Fear Of Waiting Too Long

Fed Announcement: September 17, 2015

With interest rates hovering near zero, the Federal Reserve is in a difficult spot. Even if the Fed raises rates in September, they still have two problems on their hands:

  1. Very limited supply of policy bullets if the economy goes south.
  2. A 0.25% hike would still leave a tremendous amount of inflation-tempting liquidity in the financial system.


But Inflation Is Low, Right?

Yes, it is. The issue is not where inflation is today, but where it may be down the road. The longer the Fed waits to start draining liquidity from the system, the higher the odds inflation will begin to pick up down the road. Even if they raise rates in September that would hardly represent a significant change to future inflation risks.


How Concerned Are The Markets?

Is the current pullback in stocks different than recent V-bottom pullbacks (i.e. October 2014)? The answer is provided in this week's stock market video.


Investment Implications - Bulls Need To Prove It

Our market model began reducing risk on July 24. The model will only consider increasing our exposure to stocks if the hard evidence can begin to improve. A good start for the stock market bulls would be to clear and hold above the 2001 to 2032 range on the S&P 500.

$SPX S&P 500 Large Cap Index INDX

Another and more detailed look at V-bottom odds can be found in this August 21 analysis.

 

Back to homepage

Leave a comment

Leave a comment