Author: Innovative Income Investor

The pause in rates was as I expected and the hawkish statement was also mostly as I expected. Although the hypocrisy of the statement – with numerous members expecting to see a need for further rate hikes, never ceases to amaze me.

For years these folks have made policy errors which were obvious – zero rates for years even when inflation started to roar – and now they (some members) think they have the ability to foresee the future – where did data dependency go?

My worry with the super hawkish statement is how many more banks will be seized – of course I am ‘talking my book’ since I own numerous banks without current financial information as to how they are performing which turns things into something of a crap shoot – I guess that is the ‘risk/reward’ and all of us know full well that there is plenty of risk in most banking issues. I had already pulled away from buying more bankers and this certainly will temper my desire to own incremental shares.

Well actually ‘day of reckoning’ is probably overstating the long term importance of today. Sure it matters whether the FOMC raises the fed funds rate–but whether it is raised or paused life will go on tomorrow. With the CPI being reported yesterday at or slightly below forecast no doubt the FOMC has cover to pause rate hikes which is what I think they will do–of course they could move rates up by 1/8%–there is no rule movements have to be in increments of 1/4%.

So we will see the producer price index in a few minutes–not likely to surprise or be a factor in today’s interest rate decision. Through the rest of the week the economic news is fairly minor – to me the most important news will be 1st time unemployment claims tomorrow–employment will determine where we are going – over time – with this economy.

No action in my portfolio yesterday – my portfolio just drifted no real gains or losses – with a bunch of CDs, treasuries and money markets portfolios move very modestly.