U.S. Indexes were closed Monday for the Columbus Day Bank Holiday. The only news of note was a speech from Fed Member Hammack: Treasury rates right now are “modest” by historic standards. If the economy were to return to a 3% home mortgage it would likely mean something had gone wrong in the economy. The neutral rate is likely higher but it is hard to pin down. Hearing “early warning signs” of a possible problem with inflation expectations. Need to “cool the economy at the margins.” Higher interest rates won’t dissuade hyperscalers, but might influence firms in other industries. The question for the Fed now is how fast to make policy more restrictive. Don’t want to threaten the jobs side of the Fed’s mandate. There is more restraint that is needed; if monetary policy does nothing market conditions would change. Comments from low income workers was first about trading down, now they are beginning to juggle what bills to pay. The message is hawkish. Hammack is framing the debate around how quickly to make policy more restrictive. Her concern about inflation expectations is key. If households and businesses begin to expect persistently higher inflation, bringing inflation back down could become more difficult. However, she also recognises the balancing act. Lower-income workers are struggling to pay bills, and she does not want to threaten jobs. For traders, the comments lean toward tighter policy, but leave the pace unresolved. Her view that the neutral rate is likely higher also suggests that today’s rates may provide less restraint than their level alone would imply. Futures Trading was extremely quiet despite Oil closing higher by 1.5%. Meanwhile, European Indexes ended Monday’s session with a gain of 0.65%.
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For anyone following my Platinum Service it was flat yesterday and is still ahead by 2223 points for October after ending September with a nice gain of 7767 points, after ending the month of August with a gain of 2645 points after closing July with a gain of 8031 points, after ending June with a new record of 10527 points after ending May with a loss of 1104 points, having ended April with a gain of 1730 points, after ending March with a massive gain of 9002 points, having closed February with a strong gain of 5482 points after ending January with a gain of 4757 points, having closed December with a gain of 2599 points, after ending the month of November with a gain of 4542 points, after ending October with a nice gain of 5110 points after closing September with a gain of 3774 points while ending August with a gain of 3362 points after closing July with a gain of 3753 points after closing June with a gain of 3530 points, having closed May with a gain of 3606 points, after closing April with a gain of 7685 points after closing March with a gain of 2254 points while closing February with a gain of 4180 points. January ended with a gain of 2768 points while 1997 points were gained in December. October ended with a gain of 2179 points, after closing September with a gain of 4402 points, following a loss of 301 points in August. July gained 1908 points while June saw a gain of 2074 points. The Platinum Service made a previous record 9619 points in October 2022. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 2300 points. I have a YouTube Channel which contains recent interviews I have given This can be viewed by clicking HERE Please subscribe to this for new interview notification
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