Which Way Wednesday – Fed Decision on Market Bubble Imminent

Image result for gdp by quarterHow quickly they forget.  

It was just two months ago that the Fed directly told us (at S&P 2,280) they were concerned there was an equity bubble yet already, after just one rate hike and a 100-point additional gain (5%), the general consensus is that the Fed will not be hiking at today's meeting.  Granted Trump's first Jobs Report was a disaster, falling 50% below Obama's average of creating 200,000 jobs per month for 8 straight years (15M+) but hey, you can't go calling the President a complete and total failure just because of one horrible jobs report, right?  

We'll get another jobs report on Friday but, meanwhile, the Atlanta Fed has already pumped up their forecast for Q2 GDP to 4%, looking to repeat the huge rebound we had between Q1 and Q2 of 2014 and that was good for a 100-point S&P rally – but back in those days we used to wait for the actual improvement to take place before rallying the markets – now we rally on rumors of GREAT things to come!  

So, it's kind of doubtful the Fed, who are about 50% above the general consensus of where Q2 (you're soaking in it) will be over the next 58 days, are thinking Friday's Non-Farm Payroll Report will be another bomb and, if that's the case, why wouldn't they be looking to raise rates another quarter point since the last quarter-point hike did nothing to deter investors and it did nothing to change the yield curve either as rates are lower now than they were at the last meeting (3/15).  

In theory, the Fed cares about jobs and inflation but recently they've been talking about stock bubbles and they are very wary of causing a housing bubble and home prices are back at their 2006 bubble peak when the Fed regrets not having taken action before allowing the entire economy to collapse and almost destroying life as we know it.  Do you think they feel lucky this time or just forgetful?

Inflation is certainly on target over the Fed's 2% level and, in fact, the Urban CPI is getting…
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