Spell Check - Fed Sentiment Analysis and Lifestyle Check - Episode 1

2022 Market Performance

Dow Jones: -8.78%

S&P 500: -19.44%

Nasdaq: -33.10% 

2023 Market Performance (through trading week 9)

Dow Jones: .74% (YTD)

S&P 500: 5.37% (YTD)

Nasdaq: 11.68% (YTD)

Fed Sentiment

Jerome Powell and co. are dead-set on lowering the inflation rate to their target of 2%. My argument is that rate increases will occur well into the summer months. 

Consumer Spending

Consumer spending remains strong. After seeing a cooling of the metric in October, November, and December of 2022, January data jumped 1.8%. 

Personal Savings Rate

The personal savings rate just bounced off an all-time low, but it didn't bounce high. The savings rate is still near an all-time low and it seems consumers are still on a spending spree. 

Consumer Credit

Consumer credit is high. There is likely correlation between the savings rate and consumer credit - inversion. The savings rate and consumer credit inverted for the first time since 2008 (on a percent change from a year ago basis). 

 

What does all of this mean? Listen to Spell Check to find out my take!