What’s new?

by Laura Ehrenberg-Chesler on April 10, 2014

in Economic Indicators,equity market,Fed policy,inflation/deflation,interest rates,taxes

With the equity markets selling off, and the 10-year Treasury trading just under to 2.65%. What’s new? What is going on that has created this wave of selling. Our good friend from Sandler O’Neill, Marc Flaster, visited us today and had these interesting comments: 1. The Federal Reserve is not “moving off the dime”. They will not raise rates anytime soon. Q1 GDP will likely be 1%, no more. 2. The weather had a real impact on economic activity, but it doesn’t necessarily mean that will translate to pent up demand. 3. People are raising cash to pay their taxes. 4. The market is suffering from indigestion. i.e. digesting the big gains from 2013. We don’t know what is really bothering the market. The fundamentals don’t seem to have changed. It still seems like an economy that is not too hot and not too cold, with a benign interest rate environment. That having been said, we think it is prudent to pause, hold some

cash, and see if the market gives us more clues about what if anything is new.

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