Consumer Confidence Hits 16 Year Lows

June 24, 2008

The burden of high energy prices and a weak labor market has sent consumer confidence to the lowest levels in 16 years. Top that off with the fact that the Dow cracked the March lows this morning and the Fed’s deliberation today and tomorrow should heat up. Bernanke will need to walk fine line balancing growth and inflation. After Citigroup announced 10% layoffs yesterday, executive recruiters expect another 175k jobs to be cut from Wall Street. Fed fund futures are pricing in a 90 percent chance of a rate hike in September. Today’s confidence numbers suggests that the market’s expectations may be overly optimistic. With 2 non-farm payroll reports and multiple inflation reports before the August Fed meeting, the FOMC may opt to buy themselves time by being non-committal about raising interest rates.

Posted in Uncategorized