Financial information launched final week means that the financial system is progressing at a wholesome tempo,
“I might even name it a ‘Goldilocks’ tempo,” Siegel stated. “The information just isn’t too sturdy to encourage the Federal Reserve to tighten and positively not too weak to begin a slowdown in company earnings.”
The Center East battle and the hazard to cargo ships within the Pink Sea have pushed oil costs up and will result in different provide chain delays, producing inflationary stress, Siegel wrote.
“However to this point these tensions are solely impacting oil,” he stated, “and we see no indicators in different commodities, which have been steady if not declining.”
Siegel stated he disagrees with those that assume the Fed must make six charge cuts this 12 months to have 2024.
The important thing level from the current Federal Open Market Committee assembly was Jerome Powell, the Fed chair, being extra versatile and prepared to chop charges on financial weak point, he stated, including, “If actual financial development stays sturdy, the Fed may preserve charges precisely the place they’re, and we may have sturdy fairness markets.”
Powell’s flexibility lowers the chance for recession and raises possibilities for continued development or a softer touchdown, Siegel wrote. An inflation flare-up may flip the financial system extra destructive, “however I believe the prospect of that’s low.”
(Picture: Lila Picture for TD Ameritrade Institutional)
