William McChesney Martin, the chairman of the Federal Reserve under five presidents from Truman to Nixon, famously said the Fed’s job was to remove the punch bowl just as the party was warming up. Seems like the current occupant of that job expects the bar to be open all night.
As our Quote of the Week highlights, chairman Jerome Powell weighed in earlier this month on the inevitability of the recovery phase going on “indefinitely.”
That articulation had at least one of our more astute credit investor friends fretting. In a conversation about the state of the market, he told us, “When even the Fed chair says this cycle could go on essentially forever, that tells you a lot.”
Where have you gone, Janet Yellen?
Until equities took a dive this week, a bullish posture was hard to dispute. It seemed the Dow was headed for 27,000, despite all the noise on tariffs and trade. After all, last Friday saw the jobless rate hit 3.7% – a level not seen since December 1969.