Registered Investment Adviser Caleb Lawrence
With the Trump administrations trade war set to begin later this week and another expected interest rate increase on tap as well. The major averages plunged in opening trade, entering the final hour with significant losses.
State and Local government tax receipts increased 2.4% from a year ago in the 3rd quarter of 2017, the slowest rate of increase recorded last year. Brought down by sharp reductions in the rate of growth with respect to severance, corporate and the oh-so important sales taxes as they grew just .5%.
New Fed Chairman Jerome Powell will oversee his first FOMC or Federal Open Market Committee meeting later this week. Expectations are that the Fed will raise rates for a 5th time by .25% and adopt a more hawkish tone regarding additional rate hikes going forward. Of note its been said that Bull Markets don’t end the Fed kills them and it usually occurs after the 3rd hike. Additionally, real estate and construction activity is wobbling noticeably. The Fed is now on its 3rd consecutive debt fueled asset bubble in the last 20-years, each bigger than the last, and each one completely missed by the Chairman and Federal Reserve. This despite the fact that FRED or the Federal Reserve Economic Database is replete with information and pretty charts and graphs illustrating said bubbles. Never mind all the private sources of information as well. The real challenge for the Fed and other Central Banks is, what exactly will the policy response be if the current, largest by far, bubble blows up like the last two did. Because it has long been a question of “when” and not “if”.