The Fed, The Deficit & Earnings

Check out the accompanying pdf and chart collection. Executive Summary: The Fed once again alerted the financial markets that the federal funds rate will remain restrictively aloft for longer than generally expected. Managing the market’s expectations in this way rather than raising rates further might lower the risk of a credit crunch and recession. We agree with the FOMC members who collectively anticipate a soft landing. … Also: Inflation has boosted federal entitlements and interest outlays, ballooning the federal budget deficit to worrisome heights, and soon the Biden administration’s spending spree will take it further north. … And: Get ready for a better Q3 earnings season; that’s the message from the earnings estimate data that Joe tracks for S&P 500 companies.