What is needed to get back on track? I believe the Fed needs to stop raising rates. It’s not a magic solution; if the Fed stops raising rates, things won’t automatically revert back to all good or normal. We need to get government spending in line, and the consumer needs to get healthy again before that can happen.

Maybe Lionel Ritchie was on to something. It would seem this story shouldn’t be a story, but given today’s political climate, here we are.

Hiring has been strong this year, especially at restaurants and retailers. But is there a change coming?

Ever heard of a “ Jacob’s ladder” ”? It’s a notoriously difficult sailing ship apparatus that requires finesse to use effectively. One small shift in body weight, and you get all twisted around (if you don’t fall completely off). Federal Reserve Chairman Jerome Powell seems to be grappling with his own Jacob’s ladder, balancing between raising rates to tame inflation and supporting banks under increasing pressure due to the Fed’s rate hikes.

To say lots has been happening in the U.S. banking system over the past two weeks is quite the understatement. First Silicon Valley Bank and Signature Bank were closed by regulators. Then fissures appeared over at Credit Suisse, which reported in February that clients pulled $119 billion out in the fourth quarter and that in 2022 the bank realized its biggest annual loss since 2009.

Remember the phrase, “March comes in like a lion and goes out like a lamb?” As we closed out a turbulent February, where we gave back almost half of our sparkling January returns, March started much like February ended.

Markets had their best January since 2019, and the upward momentum has spilled into a strong start to February thanks to the dovish Fed last week.Markets grappled with this information while also keeping a close eye on the release of the Fed minutes, which showed the Fed was nowhere close to considering a pause, let alone cuts.

Markets had their best January since 2019, and the upward momentum has spilled into a strong start to February thanks to the dovish Fed last week.

Overall, the U.S. economy grew at an annual rate of 2.1% in 2022. It’s a pretty modest number, but if you consider that growth was negative in the first six months, the fact that we managed to get above 2% for the year is pretty remarkable.

Year-over-year producer prices also declined, dropping from 8.0% in October to 7.4% in November, then 6.8% in December. This is great news and clearly where we want to see inflation heading.

We rounded the corner into a new year, and stocks ended the first full week of 2023 on a high note, with each of the three major markets up more than 2% on Friday.

In typical Dr. Jekyll-Mr. Hyde fashion, Federal Reserve Chair Jerome Powell first gave markets hope that after the Fed raised rates at its final meeting of 2022, they might pause to watch what a 4.25% Fed Funds rate would do to inflation and the economy. Predictably, markets soared on the possibility of a pause on rate increases. Then — just as suddenly — he stepped up to the microphone following last week’s meeting and said the Fed still isn’t done.

Everyone seems to believe we are on the brink of a recession, and the debate is about when it will start, how long it will last, and how severe it will be. Anyone who works in any sort of forecasting knows these three pieces of information are vital to formulating a forecast, and right now, we don’t have answers to any of these questions.

While people were on the move in one of the busiest travel seasons in recent memory, Wall Street was pretty quiet (in a good way). Volumes are typically thinner during these short trading weeks, and Thanksgiving week is notoriously the slowest of weeks, rivaled only by the week between Christmas and New Year’s.

After a strong showing the previous week, the major domestic equities gave back most of the prior week’s gains and closed slightly lower last week.

The Federal Reserve met last week and raised the federal funds rate another 75 basis points (0.75%) to a range of 3.75%-4.00%. This really wasn’t a surprise; the markets pretty much expected the fourth consecutive increase of 75 basis points. (It’s the sixth move upward in 2022.)

The sad truth remains that we’ve had nearly zero growth this year, coupled with extremely high inflation exacerbated by high energy costs. At the same time, interest rates are moving steadily upward and adding to the misery. It’s not exactly a recipe for a robust and healthy economy, and we don’t need to see two or three quarters of negative growth to confirm we are in a recession (or, at minimum, a stagflationary environment)

The market tanked on the CPI announcement at first, then rocketed back up. The Dow went on a wild swing over 1,400 points; when the smoke cleared, the Dow was up over 800 points and nearly 3% for the day. But by Friday, rising rate fears again gripped the markets and the 10-year Treasury rose above 4%. Both the S&P 500 and the Nasdaq ended down for the week, with the Dow squeaking out a gain.

Markets kept sliding downward last week, as Hurricane Ian battered Florida and the Nord Stream pipelines sprung leaks. The human and economic impact from the hurricane on Florida will be significant, but we don’t know the full effects. Suffice it to say that it will take a while for the state to recover.