At eight years, the current economic recovery is the third longest on record. Personal income, consumer spending, household assets, and net worth, are all at record highs. Stock markets are at record highs. Corporate profits are within striking distance of their all-time highs. Federal tax receipts are at record highs.
Remember the weak May payroll report – just 138,000? Didn't think so. But, back then, that first report on May was reported as a massive economic slowdown that should stop the Fed from further rate hikes.
In March 2009, the stock market started its current bull run. At first, it was a V-shaped bounce from the 2008 Panic lows after mark-to-market accounting was changed.
The Federal Reserve just finished its annual round of large bank stress tests. The banks all passed – meaning they had enough capital to withstand a massive financial shock and deep recession.
Last week the Federal Reserve hiked the federal funds rate by ¼ of a percentage point for the fourth time since December 2015. The funds rate is still below the rate of inflation, which means the Fed is still a long way from becoming tight.
The Federal Reserve did what almost everyone expected today, raising the target range for the federal funds rate by 25 basis points to 1.00% - 1.25%.
When the Federal Reserve raises rates by another quarter percentage point on Wednesday, you're going to see many stories about monetary policy getting tight and the potential threat that poses for the economy in general and the bull market in stocks in particular.
With home prices recovering, builders will become more active and housing will follow the path of vehicle sales...with a lag, helped along by too much government.
Now that we're eight years into a bull market, some investors just assume something has to go wrong. As a result, we see lots of stories and get lots of questions about "bubbles," as in "what market or sector is in a bubble already?"
While some investors are freaking out about investigations, tweets, or the personality of President Trump, we are still watching policy.