Fed Watch – 11/15/2024

The below transcript is a literal translation of the podcast audio that has been machine generated by Notta.

Manufacturing continues to be weak with the rate-of-change of mine is 0.2 across the board in terms of the 1/12, 3/12, 12/12. U.S. industrial production was weak the data trend 12 month-moving-average data trend fell back into recession. It’s a very mild recession it’s only down 0.2 percent from one year ago, and all of that seems to be in the manufacturing sector. But it’s the lowest level we’ve seen in 22 months now, so we’re in this sluggish environment because I don’t want to depress anybody. There is some good news hidden in that in that the Non-Defense Capital Goods New Orders data for October came in with a pretty good number, the 1/12 was plus 0.7 percent, no coincidence. I mean no mistake, that’s just coincidence. And we may have a June 2024 low in terms of the new orders so we’ll have to see how that goes. Overall though with the PMI dropping down to its lowest level in 15 months we’re pretty much completing the picture of this really a mixed bag out there the economy is like doldrums. We’re just not getting a fair wind or an adverse wind at this time. We just sort of seem to be adrift. Our own ITR leading indicator is rising. It’s the highest level we’ve seen in 25 months, but it’s still a negative number so that also is just a mixed signal. Just a word on the election that obviously happened earlier this month. During my talks got a lot of questions about that election. Does it change our view of what’s going to happen in the 2030s? And the answer is no. We haven’t changed any forecast from before the election and after the election. We don’t expect that we are going to need to. As we look over the policies being put forth, we look over the timeline, we need to see a lot more detail. We need to see what the Senate is going to go along with in terms of confirmations. But at this time, we don’t really see any need to change the macroeconomic forecast. I doubt that we will. We’re still going to enjoy good years going forward. We still think interest rates will reach a low likely around mid-2025, although the marketplace, and this is driving the Federal Reserve crazy, I assume. The Fed’s pushing on this strength, lower interest rates via the Fed funds rate, discount rate and the marketplace isn’t cooperating very much. And that may be why ultimately in January, we’ll see some more cuts from the Fed trying to control the marketplace to go in the direction that they want it to go in. So look for some good rise. Inflation is coming back and we haven’t changed our mind on the 2030s. A lot of people have been coming up to us asking, well, you know, should we hold on to our business? Should we sell our business? When would be the best time to sell our business? How will our markets fair on the way up and on the way down? In response to that, we’ve developed the Financial Resilience program. It’s a blueprint, financial blueprint for your company through the 2030s. You can go online and find out more about that. This, when I talk to you through FedWatch, we’re talking about the very short term. You’ve got to keep this short term within the long term context, which is why we’re trying to answer these people’s questions. Thank you very much for watching this edition of FedWatch. It’s going to be interesting, folks. Expect more tariffs, expect more inflation, expect higher pricing and expect higher interest rates for once this economy starts moving in an upward direction again. I’ll see you next week.