Fed is data dependent?

by | Sep 16, 2019

“Insensibly, one begins to twist facts to suit theories, instead of theories to suit facts.”

- Sherlock Holmes

A Scandal in Bohemia

The FOMC’s job never seems to get any easier.  Pressure to cut rates once again is building as domestic and foreign forces continue weighing in.  Yet real rates are or very near 0%.  But Mr. Powell may finally be listening to what President Trump has often so fervently advocated.  But President Trump should be cautious in his efforts and manner to bring rates down. 

At one time the administration was considering removing or firing Mr. Powell, but President Trump should remember that Mr. Powell may have as much or more power to fire the President as the President does him.  The equity markets have baked in the 25-bps cut so I don’t expect anything much different than that.  The European Central Bank cut rates last week and decided it needed to do more bond buying. 

The contagion of Japanese monetary policy continues to move west.  Inflation in the US was stronger last week than expected but retail sales softened.  Housing data this week should help the forward outlook.  The migration of several key economic indicators toward a slowing economy has begun with manufacturing most noticeable.   Employment data remains the bedrock of the expansion.  Overall, most data still point to a growing economy, but it appears that “data dependent” has left the room and closed the door.  

As the Fed tries to coax an ever-slowing economy into perpetuity, the symptoms of old age, massive deficits and lack of maneuverability will one day be a bad dream come true.

As you consider the information provided with the Salt Creek Investors Asset Allocation Platform (the “Program”), please review the following:

The information and descriptions provided about the Program are for educational and information purposes only and should not be used or construed as investment advice, an offer to sell, a solicitation of an offer to buy, a recommendation for any security, or suggest any course of action. LaSalle St. Investment Advisers (“LSIA”) does not guarantee that the information or descriptions supplied about the Program are complete or timely. LSIA makes no warranty with regard to any results obtained from the Program or its deployment. LSIA is not responsible for any direct or incidental loss incurred by relying on information provided about the Program. The allocations presented herein are illustrations and completely hypothetical. None reflect actual investments or investment results and do not reflect allocation of any individual portfolio. Asset allocation and its results vary over time. Other allocations or asset investment categories not offered in the Program may have characteristics similar or superior to those illustrated. Past performance of any model or allocation is no prediction of future results. Neither the Program nor any system/model can predict the future of any market or price movement in a market. Diversification and asset allocation do not guarantee against the risk of investment loss, including risk of loss of principal. Information provided regarding the Program is as of the date of publication and may change at any time without notice. Information has been included which was obtained from third parties and is believed to be reliable and complete. LSIA does not warrant the accuracy or completeness of such information. LSIA is a registered investment advisor and does not provide tax, accounting or legal advice ‒ the information and/or descriptions provided do not constitute such advice. More information regarding LSIA and its investment strategies can be found in the LSIA brochure, ADV Part II, which is available online or through LSIA. Asset allocation may not be suitable for all investors. Before deciding to invest, potential participants should consult with an investment adviser to determine an appropriate investment strategy and methodology which meets the investor’s specific financial needs, objectives, goals, time horizons and risk tolerance. The information and description provided herein has been made without consideration of any investor’s particular suitability for investing in the Program. Asset allocation also involves investment in various asset classes which are not insured by the government. Investing in fixed income and/or high yield securities involves additional concerns including interest rate risk, credit risk and reinvestment rate risk. Investing in securities outside the United States may entail greater risk than investing in domestic U. S. markets. These risks typically include political and economic uncertainty of foreign countries as well as currency exchange fluctuations, including foreign currency exchange rates, political risks, different methods of accounting, financial reporting and foreign taxes. The prospectus accompanying a security should carefully be reviewed before investing. The services described herein are available to persons residing in any state where they would otherwise be contrary to local law or regulation.


Copyright © 2019 LaSalle St. Investment Advisors, LLC., All rights reserved.