"BMT Investors" Bulletin Board

[kscarbel2]

"There is no risk-free path for policy as we navigate this tension between our employment and inflation goals. The decision to lower rates was a close call. I can make a case for either side. A reasonable base case is that the effects of tariffs on inflation will be relatively short-lived, effectively a one-time shift in the price level. Our obligation is to make sure that a one-time increase in the price level does not become an ongoing inflation problem, but with downside risks to employment having risen in recent months, the balance of risks has shifted."

Fed Chair Powell

Powell downplayed dissenting votes against Wednesday’s decision to lower interest rates again, but a slew of finer details from the meeting revealed just how divided the central bank has become. He  pushed through the quarter percentage point cut not only over the objection of a few voters. A much larger group of regional Fed bank presidents who participated in the debate but weren’t among this year’s voting roster also opposed the cut.

 

 

 

 

 

 

 

 

 

 

 

 

 

[mowerman]

The whole thing sucks if you’re paying 6-700,000 for a house these days that is not a whole lot we could do about it …off the subject but I remember years ago California auto insurance was way out of control I was paying 8,000 a year on my U model and somebody did something about it … it dropped to half that years later now this place is the same way no but there’s so many stupid  people here now I can hardly blame insurance companys for socking  it to us … don’t even wanna get into that lol 

[mowerman]

Pretty much  lots of people lining  their pockets with that extra interest while  the rest of us are paying the price … it would probably take a lifetime to straighten out all the issues we have here 

[kscarbel2]

"Good news used to send the stock market up......and that's the way it's supposed to be."

President Trump

 

From -43:00

 

[kscarbel2]

The oil stocks are pricing in an attack.

“It is my assessment that a strike will take place,” a high-ranking Israeli Defense Force (IDF) official told The War Zone. “The key variables – timing, method of execution, and the identity of participating forces, whether U.S. assets, the IDF, or additional coalition elements should they be involved, will be subject to strict and aggressive compartmentalization.”

“Likewise, the final decision to proceed with execution rests with a single individual alone,” the official added, referring to Trump.

https://www.twz.com/news-features/military-buildup-in-the-middle-east-continues-including-what-trump-describes-as-a-big-flotilla

[kscarbel2]

Financial Times  /  January 28, 2026

Investors are betting the Trump administration will run the economy “hot” ahead of midterm elections, with buoyant stocks and a weaker dollar reflecting expectations of strong growth and rising inflation.

A string of robust economic data has defied predictions of a slowdown in the US, sending credit spreads to the tightest levels of the century and helping stocks hit fresh record highs this month.

At the same time, there is a growing belief that President Trump’s tax cuts, deregulation push and campaign for lower interest rates will add more fuel to the economy this year, as the president seeks to bolster support ahead of November’s congressional polls.

“There is a carefully engineered plan to have the US economy humming into the summer,” said T Rowe  price's Arif Husain.

Trump boasted last week in Davos of “exploding” US growth, after figures showing GDP expanded at an annualised rate of 4.4 per cent in the third quarter of 2025, powered in part by the AI boom.

The Atlanta Federal Reserve’s GDPNow model is forecasting an acceleration to 5.4 per cent in the final quarter of last year.

Despite the economy’s rude health, investors expect the Federal Reserve to cut interest rates later this year under chair Jay Powell’s successor, who is set to take over in May. Higher spending and tax cuts in the president’s flagship “One Big Beautiful Bill”, passed last year, are also expected to further juice growth in 2026.

Trump administration advisers say a productivity boom will also help fix one of the economy’s weak spots — a cooling labor market.

“We have seen massive gains in output that are being driven by productivity; you should soon start to see a pick-up in jobs,” says Joe Lavorgna, economic counselor to US Treasury secretary Scott Bessent.

According to Bank of America’s recent global fund manager survey, the proportion of investors expecting the economy to strengthen over the next year, as well as expectations of an economic “boom”, are both at the highest level since mid-2021.

The extra stimulus for an economy that is already motoring has buoyed the stock market, with the S&P 500 closing in on 7,000 points for the first time and the domestically focused Russell 2000 far outstripping the blue-chip index this month. However, it has also left investors bracing for another wave of inflation amid expectations that the new Fed chair will support Trump’s desire for lower interest rates.

Two-year US break-evens, which provide a reading of the market’s expectations for short-run inflation, have risen from 2.25 per cent in December to 2.68 per cent.

But political pressure for extra spending when the economy already looks healthy is clear. JP Morgan's Karen Ward says “We’ve got mid-terms approaching in November, that will lead to more pressure for more vote-winning stimulus measures.”

Spending on AI build-out is expected to keep rapidly expanding in 2026, while Trump’s tax bill includes measures to incentivize investments in machinery and factory equipment. It also means tax cuts for many American workers; Ward expects $440 billion will be returned to US households through tax refunds this year.

Stronger than expected economic data has led investors to modestly rein in their rate cut bets in the early weeks of the year, with two quarter-point reductions expected in 2026.

A Senate-led backlash to a Department of Justice probe into Powell has damped concerns that Trump will be able to appoint a close ally to head the world’s most important central bank. However, some analysts worry the central bank will succumb to the president’s calls for deeper rate cuts ahead of the November mid-terms.

MUFG's George Goncalves is expecting 3 or 4 cuts this year, partly a reflection of the new Fed leadership. “Based on fundamentals there is room for two more cuts,” he said. “But I’m factoring in the politics.”

Carmignac's Kevin Thozet says the addition of new household subsidies and lower interest rates into the already-strong economy are reasons to be “cautious” on long-term US Treasuries and the dollar. “If the economy does not need this reflationary push, Trump does, in order to win the midterm elections. All of this, however, is expected to come at the cost of higher long-term rates and downward pressure on the dollar."

[mowerman]

With all this going on, I’m surprised my investments are staying pretty steady. I’ll take it.