Author: Innovative Income Investor

As expected the Fed has raised the Fed Funds rate by 1/4%–but has included somewhat hawkish verbiage in the statement implying more hikes to come. Anyone looking for a pause needs to keep hunting for one I guess.

Stephen in a comment this morning hit it perfectly–“the Fed held the increase to 1/4% (versus 1/2%) in exchange for a hawkish tone”–he hit the nail right on the head.

As expected the S&P500 has gyrated around on the news–interest rates haven’t moved too much yet.

So we have that out of the way until the next meeting which will be March 21/22—so back to ‘normal’ business tomorrow.

In an hour we finally get the announcement on the Fed Funds rate increase, but it will be 2 hours or so before we get all the news out–i.e. Jay’s presser.

This morning we had the ADP employment number come in very weak–for what it is worth 106,000 new jobs created versus a 190,000 forecast–obviously this is like throwing darts–anybody’s best guess. The ‘official bureau of labor statistics comes out Friday and there is a 187,00 new jobs forecast–we will see if the guessing (forecast) on this number is better than the ADP report.

The 10 year treasury is yield is off 5 basis points now to 3.47%–equities are off 1/2% to 1% in a very orderly sell off—I’m sure all the algo’s are ‘locked and loaded’ for 1 p.m. (central) and if the pattern is normal index’s will swing sharply both directions–all likely meaningless moves.

All my accounts are very flat today–I mean really flat. Not dooing anythings at all.

It is a rarity to have gains in preferred stocks like we had in January–the gain was in the 8% area on the average share. Personally I lagged the market by 1.5% as I have an allocation to CDs and shorter maturity treasuries. I am sure many outperformed me since I spend too little time jumping on bargains and rotating around to maximize returns–my market timing typically is bad–so no use chasing around.

Today is the day–I am more interested in Chair Powell’s news conference than in the rate hike announcement as it is a foregone conclusion that the hike is 1/4% – if it is more or less the markets will be very wild. So the unknown is how hawkish will the news conference come off.

Yesterday was a nice day with the S&P500 up 1.5% based upon economic numbers indicating inflation is trending lower. The 10 year treasury yield continues in a relatively narrow range–now (6 a.m. central) at 3.48% down 3-4 basis points from yesterday–I suspect we could see a breakout (down or up) of the 10-15 basis point range we have been in for a few weeks with today’s FOMC rate hike and news conference.

I am back to the do nothing mode. With a bit of cash now available for investing (and earning near 4% for waiting) I will wait for some shares to go on sale–if rates remain in this area and no bargains appear I will forfeit 2% or so on my cash holdings–oh well.