As I indicated in Tuesday’s summary the Fed will likely raise interest rates modestly but add plenty of “dovish” language.
Markets loved this allowing for outsized gains heading into year-end better performance.
There’s a major disconnect between Yellen’s rosy view of the economy.
In that regard she often repeats her ongoing view of economic conditions as “solid” and any negative conditions as “transitory”. Yet economic data over 2015 remains quite weak. Just today gross Mortgage Applications declined (-3% vs prior +0.4%); Industrial Production fell (-0.6% vs prior .04%); PMI Manufacturing Index Flash fell (51.3 vs prior 52.6) and Crude Oil Inventories rose sharply (4.8 million bbls vs prior -3.6 million bbls). The only