Transcript:
Tom Vaughan:
Hello, everybody, welcome to Wednesday, a fantastic green shirt day today, the S&P 500 was up 3%. going sideways at the beginning of the day, the Federal Reserve Chairman comes out to speak, and really started to take off based on some of his comments.
So the things that seem to be driving the market the most, number one, there was a question about whether we’re going to have a three quarter point increase here in the future. And he said that that was essentially off the table at this point in time market really started to move there. And then he also talked about how, you know, things were very strong, the consumer household, and businesses are super strong, and they felt there was room for them to be able to raise rates, slow things down, some, without kicking us into recession, of course, the market has been focused on all these negative things, you know, that big rate increases that are possible the recession that could happen this year, and all of these areas. And so and he’s talking about it in a different manner, sort of the same way that I’ve been talking about it also that things have, there’s enough power in the economy to be able to push down on it without killing it.
And I think that’s the thing that’s different about this economy than it was, for example, you know, it other high inflationary periods, we’ve got 11 point 6 million open jobs, there’s basically two jobs open right now, for every person collecting unemployment, it’s really crazy. So that’s not a recessionary sign, it’s actually a problem of too much demand. And so they’re going to push down on that demand, try to get the, you know, the unemployment still, you know, at a good level where it is now, but maybe bring down those job openings, some as far as that goes, just to kind of keep wage inflation from really hitting, you know, the inflationary cycle, as far as that goes.
So, very fascinating, he did admit that one of the problems that they’re gonna have with fighting inflation, will be the supply side, specifically talked about what’s happening in Ukraine, and what’s happening in China as something they can’t really control. And so those are kind of restricting potentially the supply of goods that we need of all types. And really, you know, we need to get supply up, if we’re going to bring demand down. So to kind of get those into equilibrium. And he talked about getting them into equilibrium also. So I think that’s, you know, something the market looked at as a positive also, really, you know, he went down the middle, didn’t get too, you know, aggressive on talking about raising rates, and certainly wasn’t, you know, on the other side, either in the market was really, I think, expecting a lot more negativity, that didn’t happen.
So that’s one of the problems right now for the market is just there’s so much negativity on one side, that it doesn’t take a whole lot. And you just, you end up with this massive rally today. Last time, we had the federal Chairman come out and speak after the March meeting, we did have this, you know, pretty good run. We’ll see if that happens this time. So if we can maintain it, because we actually gave gave that back eventually. But really good day today, great move and technology and some of these other areas that you know, have been beaten down a bit this year. You know, the Treasury yields came down, which is a good thing, at least at this point in time, because they’ve come up so much. And so really, you know, fascinating timeframe right now. Look forward to seeing what’s going to happen tomorrow. We’ll talk to you that Thank you.