In The Lion King there comes a pivotal moment when Simba has to claim his rightful place on the throne and confront Scar. His mentor/guardian Rafiki reacts to this crossing of the threshold by Simba with the line “It is time!”. This is how I feel about Jay Powell and the Fed in terms of cutting interest rates.
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Now, I go down to Speaker’s Corner, I’m thunderstruck
They got free speech tourists, police in trucks
Two men say they’re Jesus, one of them must be wrong
Industrial Disease by Dire Straits
Interest rates came down quite a bit and then shot up after the non-farm payroll report was released on Friday,
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Last week I had my annual cardiologist appointment which involves having an echocardiogram and EEG. I have been doing this for a number of years because I had mitral valve prolapse and a corresponding leaky valve which required annual monitoring. For many years the situation was stable until 2020 when the valve started leaking much more than it had been and was starting to enlarge the heart.
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The Grateful Dead have a song called The Eleven. In many ways the lyrics are unintelligible. It was written during their psychedelic phase so the lack of comprehension makes some sense as their senses were non-sensical.
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Whenever I think about the financial equation of the tennis court and associated amenities I just had built and question my sanity, I then experience incredible non-financial benefits to lend credence to my decision to do what I did and invest what I have.
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I’ve been wrestling with the theory that we have had a regime change from the credit dislocation cycles that have led to emergency-type measures from the Fed via balance sheet expansion and near 0% interest rates to one that has inflation as much more of a central concern due to powerful fiscal expansionary tendencies and other factors such as onshoring of manufacturing,
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Just when the market prices in four cuts for 2024, either the Fed comes out to talk the market down or data is released to suggest investors are being too aggressive in pricing in the number of Fed cuts.
We are now back to the point where the market and Fed are once again aligned on the number of cuts in 2024.
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Since this is the week my book (March 2015) officially comes out in bookstores, I would be remiss not to acknowledge it. Writing a book has been on my bucket list for a while so I’m excited and proud to have completed such a monumental goal.
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There are things you can replace
And others you cannot
The time has come to weigh those things
This space is gettin’ hot
You know this space is gettin’
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Last week, the GDP report for the 4th quarter was released as well as the Fed’s favorite inflation index, the Personal Consumption Expenditures price index (PCE). The Fed should be very pleased with what the reports revealed and how it has defied the overwhelming consensus that a hard landing was necessary to break the back of inflation.
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