Everyday, Everyday I Have the Blues
By John Stoltzfus,
Chief Investment Strategist
Trend Analysis
Market Strategy Radar Screen Weekly - May 26, 2015
In this article:
- Market Analysis
- S&P 500
- Asset Allocation
Fed Chair Throws the Gauntlet Down
In our reading, rate rise this year is just a matter of when
“People get ready, there's a train comin'…You don't need no baggage, you just get on board…”
— Curtis Mayfield
In the pre-holiday week leading into the Memorial Day weekend, Fed Chair Janet Yellen delivered a speech to the Chamber of Commerce in Providence, Rhode Island.
We were not surprised by the statements made by the Fed chair last Friday.
We think that much of the noise that surrounded the period just before, during and after her talk to the Providence Chamber of Commerce was a dress rehearsal for what lies ahead in the months and perhaps even years on the path to interest rate and economic and markets normalization.
Throughout the Fed chairwoman’s talk we heard reiterations of the types of statements the Fed has made over the last six years, that we believe are designed to provide transparency, address the concerns of skeptics and build or reinforce confidence in the effectiveness of the Fed’s policies as officials shape monetary policy to help guide the economic system from the era of QE to one of economic and interest rate normalization.
Use of words such as “modest” and “gradual” was prominent in the Fed chair’s speech in Providence last Friday.
There was symmetry to her talk in that it seemed that for every reference to the possibility of Fed tightening there was an offset to soften any concern and reassure the listener that responses would be measured, well thought-out, responsive and not reactionary in nature. A reassurance that decisions would continue to be data-driven appeared interwoven throughout the message.
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