Tag Archives: FED

Shhh … FED Quietly Pauses … Finally

The FOMC (Federal Open Market Committee) led by Jerome Powell, quietly paused this week.

FOMC No Change

Mid-Week, the FOMC announced no change in their controlled short term interest rate.

12-16-19 Fed Funds Rate

We have been vocal about not lowering rates moving forward, to keep some gunpowder for the next recession.

After a market desired multiple small lowering of rates earlier this year, this week, the FOMC effectively did nothing, and did not disturb Capital Market Participants… finally.

They also made no future promises, again, with market blessings…

We like it!

Have a Great Friday!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents

Janet Yellen Whispers to Markets ….. Normal Begins Again Next Week

In a sign of just how delicate markets are and how soft the delivery of information needs to be, this week we believe, Janet Yellen whispered to market participants ….

Here is how:

Shhh, Interest rates are too low guys

From this “Research Paper” (subtle press release maybe) :

  • This from a Dovish (less likely to increase rates) San Francisco Federal Reserve Bank
  • Wall Street you are underestimating the likely increase
  • Increases may come faster than you expect
  • Rates may currently be lower than they should be

We will save you the chart as it is a Friday.

Talk about reading the Teas leaves.

Oddly, this report, again from a Dovish FED President (makes all the difference in the world) has moved rates higher than any recent economic or geo political risk relief could ever do.

When Janet speaks … even subtly … people listen…

Oh, that’s from another time, showing my age! EF Hutton

Back to Normal Next Week

When market participants are away or only skeletal crews are running “Wall Street” we tend to get close to the vest as well. Trading volume is picking up and email/phones are beginning to be answered again.

This puts us in a more comfortable position making adjustments. Expecting a bit more movement in our portfolios in the coming weeks than in the last several would be our guess, of course we never adjust unless we need to, but we have more confidence when the “Wall Street theatre” is full, rather than empty as it has been for some time.

Have a Great Friday!

John A. Kvale CFA, CFP

http://www.jkfinancialinc.com
http://www.street-cents.com
8222 Douglas Ave # 590
Dallas, TX 75225

 

Chair Yellen … Please Continue, the Economy can handle it, and may need it!

Tomorrow and Wednesday mark another FOMC meeting.  It is expected they will reduce asset purchases by another $10 billion per month to a new $35 billion monthly level ($85 billion monthly near the start of 2014.)  We look forward to Chair Janet Yellen’s public testimony on hump day for clarification and guidance

If it has not happened by now it will not

Quantitative Easing aka QE or the purchase of fixed instruments by the FED to lower rates was a clever and handy tool when first used, but has overstayed its welcome. Rates have been low enough for long enough, we think it’s done all it can do!

The side effect of such purchases are a ballooning balance sheet (the FED creates money synthetically to buy the assets … not to worry there is a debit and credit entry for those accountant likes).

Here is a chart from our friends at JPMorgan of the afore mentioned balance sheet that also finds its way into our upcoming newsletter (that’s Trillions $$$) … getting pretty big!

Feds Balance sheet

The FED has a problem

In our coming newsletter we have an article concerning the FED’s ability to raise rates with so much extra money sloshing around in the system, which is a direct byproduct of the QE.

Janet … Go ahead and continue to slow those asset purchases (or even go more than $10 billion reduction) please! The US economy can handle it.

John A. Kvale, CFA, CFP

www.jkfinancialinc.com
www.street-cents.com
8222 Douglas Ave #590
Dallas, TX 75225

 

More Cowbell Mr. Bernanke? and Stage 1 JK Technology Upgrade Complete

Today we will get the official answer….Did the Fed actually leak information to their respective favorite reporters last week and are planning on additional stimulus?

If they did not and are not planning on more “Cowbell” market participants may be disappointed. For that matter, it is highly likely market participants will turn negative on anything short of a major announcement, in our opinion.

“We have never seen that before!”

That is our most hated phrase regarding technology improvements and upgrades… especially when coming from those doing the upgrade. While we thwarted that phrase, our optimistic view of no hitches were not achieved. The conversion occurred prior to dark but well after the original scheduled time frame. Today we will hopefully feel we have a Tiger by the Tail with our new speed.

Next step, Phones…..this wil not occur until late August, we will share the adventure with you.

Have a Super Day!

JK

214-706-4300  http://www.jkfinancialinc.com

PS I will be traveling the coming two weeks.