Transcript:
Tom Vaughan:
Hello, everybody, and welcome to Wednesday, the S&P 500 was up point 4%. Today, the Fed meetings came out for the minutes from the meeting that happened last month. market responded positively to them. I don’t think there was a lot of new news, there was an awful lot of talk inside the minutes about how the Fed was very willing to essentially create a recession or a big slowdown in order to fight inflation. They talked about that some in the past, too. So that wasn’t a big surprise. It is one of the bigger concerns. But since that meeting, we’ve had quite a few different things that have kind of softened up here. And one of the big things today was the price of oil fell below $100, got all the way down to $95 actually had hit a high of 130, you know, after the invasion of Ukraine, and ended up at $98 today. So ultimately, hopefully, that can push down the price of gas at some point in time. And that’ll take some ease off the inflationary pressure, of overseeing other signs and indicators of slowing.
One of the things that we do watch for is kind of these inverted yield curves where, for example, the two year treasuries right now paying more than the 10 year Treasury that’s fairly rare, and has happened fairly consistently prior to recessions. And that was happening today again, and it’s starting to become a bit more persistent. And that’s another thing that we look for in those inverted yield curves is that they stick around for a while, not just happened for one day, like they did back in March, the better signal from what I’ve seen in the research is really a three month treasury bill paying more than a 10 year treasury bond, that spread is still positive, meaning tenure, still paying more, although it has been narrowing, really just since probably early May. And so we’ll see how that plays out.
But the markets essentially saying, hey, you know, we’re seeing kind of slow downs. And they’re hoping that the Federal Reserve can follow along with that and start to slow down, you know, their at least their rhetoric, maybe some of the rate increases and those types of things. And I think the one thing we have to watch for, though, is the fact that the Fed might not do that, they might keep saying the same negative things. And that’s exactly what they did in the last meeting that kind of really scared the market, the market dropped quite a bit right after those meetings, because the market is seeing economic slowdown, and the Fed, at least in that last meeting wasn’t really acknowledging any of that. And it just continued to kind of happen. So that’ll be the big play here. We’ll have to see how this goes. You know, when the Fed does meet and come out and speak, they do not meet in August. So you know, we have the July meeting, and then they go to September for the next one. So anyway, looking forward to see what’s going to happen tomorrow and I will talk to you then. Thank you very much.