“Don’t fight the Fed.” -Marty Zweig, famed investor and market forecaster, 1970.
The “Fed” is the Federal Reserve Bank of the United States. Among other things, the Fed influences monetary conditions in pursuit of price stability and full employment. As we’ve seen recently – with unemployment low and inflation high – the Fed’s job isn’t simple or straightforward.
“Don’t fight the Fed” is a bit of wisdom that encourages investors to align their portfolios with current monetary policy. It will be interesting to see whether spending moves lower. While stock markets dropped in August, consumer confidence moved higher.
Some economists see consumer sentiment as a lagging indicator, meaning that it reflects what happened in the past, because it takes time for consumers to respond to economic events. Others think consumer sentiment is a leading indicator because it suggests where spending – which is the biggest driver of U.S. economic growth – may be headed. Consumer spending accounts for close to 70 percent of gross domestic product (GDP), which is how economic growth is measured.
BACK TO SCHOOL
Across the country, school supplies have been purchased and many children have returned to the classroom to start a new school year. The give-and-take between teachers and students can produce some memorable – and humorous – moments. The following are from stories shared in Reader’s Digest.
Teacher: Where is your homework?
Student: It’s still in my pencil.
Teacher: Why can’t freshwater fish live in salt water?
Student: The salt would give them high blood pressure.
Teacher: How would you make the world a better place?
Student: I’d make potato skins a main dish rather than an appetizer.
Teacher: Mira went to the library at 5:15 and left at 6:45. How long was Mira at the library?
Student: Not long.
Teacher: Why do you think our librarian is leaving?
Student: Because she’s read all our books?
Teacher: In Franz Kafka’s The Metamorphosis, a man who is discontented with his life, wakes up to find he has been transformed into a large, disgusting insect.
Student: So, is this fiction or nonfiction?
Teacher: Why aren’t you wearing your glasses?
Student: My glasses are for reading, not math.
What are your favorite school stories?
Focus – Think About It
“I have learned silence from the talkative, toleration from the intolerant, and kindness from the unkind; yet strange, I am ungrateful to those teachers.”
—Khalil Gibran, writer and poet
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SOURCES
https://www.federalreserve.gov/faqs/about_12594.htm
https://www.barrons.com/articles/fed-interest-rates-investing-mantras-51662006600?tesla=y (or go to
https://finance.yahoo.com/quote/%5EGSPC?p=%5EGSPC
https://www.bloomberg.com/news/articles/2022-09-02/browbeaten-stock-bulls-wilt-in-the-face-of-rising-fed-hostility (or go to
https://fred.stlouisfed.org/series/GDPC1#0
https://www.conference-board.org/topics/consumer-confidence
https://www.investopedia.com/insights/understanding-consumer-confidence-index/
https://www.barrons.com/articles/the-stock-market-looked-ready-to-recover-before-falling-apart-what-went-wrong-51662165266?refsec=the-trader&mod=topics_the-trader (or go to
https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value=2022
https://www.rd.com/list/funny-school-stories/
https://www.goodreads.com/quotes/117616-i-have-learned-silence-from-the-talkative-toleration-from-the