Talking Fed Rate Hike with Maria Bartiromo

With the Fed rate hike decision looming, on December 15th I had the great pleasure of being on Mornings with Maria (Bartiromo) for the entire three hours of her show. She is one incredibly talented and elegant woman, not to mention my new level of respect for being able to sit on set for three hours straight, starting at 6am. That meant being at the studio by 5:15am, which naturally demanded plenty of coffee; a beverage choice I came to understand as a serious oversight around the 1 hour 45 minute mark!

But I digress…

With the Fed’s decision and a rate hike hitting the markets the next day, there’s was plenty to discuss concerning the wisdom of to hike, or not to hike.  There are signs of the economy weakening, with many indicators at levels not seen outside a recession: 3 month moving average for retail sales, Durable Good orders, and manufacturing is in contraction.

For those who say manufacturing doesn’t matter… the ISM Purchasing Manager’s Index very closely correlates to year-over-year changes in the S&P 500.. and it is flashing warning signs. The chart below shows the ISM Purchasing Manager’s index versus the year-over-year change in the S&P 500 – think there might be a relationship!?

2015-12 ISM v SP500

All that being said, with how much the Fed has been talking up a hike, we’ve hit the point where the Fed must act or lose enormous credibility.

Speaking with Wall Street Journal Chief Economics Correspondent Jon Hilsenrath and Wilmington Trust Chief Economist Luke Tilley

Speaking with Savita Subramanian

About the Author

Lenore Hawkins, Chief Macro Strategist
Lenore Hawkins serves as the Chief Macro Strategist for Tematica Research. With over 20 years of experience in finance, strategic planning, risk management, asset valuation and operations optimization, her focus is primarily on macroeconomic influences and identification of those long-term themes that create investing headwinds or tailwinds.

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