- The Dow finished with yet another gain today
- We closed at 20,775.60
- I’ve been told that this is the longest consecutive winning streak for the Dow Jones since 1987
- Of course, we all remember how that streak came to a crashing end in October with the 1987 stock market crash
- We’ll see if the market has better luck this time around
- We got the FOMC minutes released earlier today
- I think they were interpreted as being hawkish; remember, this is all on a relative scale, they’re all doves now
- It is simply degrees of dovishness, there are no actual hawks on the FOMC or on any central bank
- The question is, “Who is more dovish and how dovish can you be?”
- But there were some statements that caused the markets to think, “Hey, maybe a rate hike is coming.”
- Because I think the members said it would be appropriate to raise rates sometime soon
- What is sometime soon?
- Is that March, or is that April, May or June?
- That’s still soon, in the scheme of things
- If you look at how slowly the Fed has been moving
- Glacial speed, when it comes to raising rates
- Soon can certainly be a few months from now
- It doesn’t necessarily mean that it is going to be March
- They could have said March – “It might be appropriate to raise rates in March”
- They didn’t say March – they just said soon
- Nobody really knows what soon is
- They did comment that they thought the markets might interpret gradual rate increases as meaning only 1 or 2 rate hikes a year
- And they were troubled by that, because maybe by saying that, by gradual, they mean 3 a year
- Not 1 or 2
- I heard some people saying,
- “Maybe the Fed is not going to go slowly.”
- Even if they do 3 – we’re still talking very gradual rate hikes, especially if you put it in context of how low rates are right now and how high inflation is already
- I keep hearing these comments from Fed officials
- They’re doing interviews and they’re saying, “Yes, we’re making progress; we’re moving slowly toward our goal of 2% inflation.”
- 2% inflation! They left that in the dust
- The last number we got in January showed a year over year increase of 2.5%
- So why are they saying they’re making progress toward getting to 2% when they’ve already zoomed past it
- They’re looking at it now in the rear view mirror
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