I’m still alive and kicking! I’m back at the keyboard, ready to dive back into the world of financial markets. As I settle back into the familiar embrace of home, I’m filled with a renewed sense of purpose and gratitude. There truly is no place quite like home, and I could not be happier to be back here, reconnecting with each and every one of you.
This morning, I made a minor adjustment to the model portfolio, and it is probable that we will maintain its current composition for an extended duration.
Briefly, nothing has really happened to the markets while I was away for a couple of days. Fed Chairman Powell and company did not cut rates as expected. It was not really that bad as his hawkish rhetoric helped to temper investor enthusiasm and consolidate the market gains achieved over the past three months. It appears that Powell, too, is aiming for a period of consolidation.
In the presser, Powell emphasized once again that before cutting rates they want to “make sure” they “get the job done” (bring inflation back down to 2%) and that they are not likely to have reached that “level of confidence by the time of the March meeting.”
“Implicitly, we do have confidence,” Powell said. “It’s not that we’re looking for better data, we’re looking for a continuation of the good data.”
As I currently see things, the upcoming job and inflation reports will not likely change my overall expectation on the rate cut policy going forward. It is not about when the rate cuts start but how much is cut in 2024, and I expect it to be higher than what the Fed anticipated in December.