Is the Fed Worried About Over-tightening?

(12/1/22) Fed Chairman Jerome Powell Wednesday implied concern about over-tightening the economy, a very different tack than was expressed just a month ago, when he said he WASN'T worried about over-tightening because the Fed had "tools to solve that problem." What's changed? Employment is showing signs of weakening, manufacturing is showing signs of slowing, so NOW he's worried about over-tightening. That's all market bulls needed to hear to surge 3.1%. But to put that into perspective, we rallied 5.5% following the release of October CPI on anticipation the Fed would slow the pace of its rate increases. But that's not what Powell said: The Fed may need to hike even more next year, raising the potential for a terminal rate of over 5%. Markets didn't hear that, however. Markets are getting a bit over-bought, the MACD Buy-signal is still in place, and markets have gotten above the 200-DMA. But with markets over-bought, it may be a little late to be chasing them; be careful!

Hosted by RIA Advisors' Chief Investment Strategist, Lance Roberts, CIO
Produced by Brent Clanton
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