Market Deflators

The stock market is in the red for the year ... for a number of reasons ... whose priorities seem to change from day to day. Today, it seems that the following are the reasons, in order of descending importance, for what are depressing the stock market ... or keeping it from going up as fast:

- Fed's stance on raising interest rates and outlook for same

- Status of tariff war with China

- Fed's monthly $50 billion reduction of its balance sheet and economic liquidity

- Slowing worldwide economic growth/US corporate profits and outlook for same

- Strength of the dollar and outlook for same

- Growth of US budget deficit

- Status of trade negotiations with the EU, Britain and Japan

- Brexit morass

- Potential US government shutdown over immigration

- Mueller's investigation and possible political repercussions

- Trump's tweets

Tomorrow all these things could be shuffled ...

Headlines

Michael Cohen strikes plea deal over lying about [Trump] Russia project

Fed points to December rate hike but is worried about tariffs and debt

CNN fires commentator who called for elimination of Israel ...

Google divided over censored Chinese Internet

Caravan women launch hunger strike, put pressure on U.S. and Mexico

New Hampshire Democrats invite rising star Beto O'Rourke to crucial presidential primary state

For economy, storm clouds on horizon ... jobless claims on the rise ...

Farage briefed Trump on May's 'worst deal in history'

Trump goes for full-blown Space Force, White House memo reveals

Trump cancels G-20 meeting with Putin, citing Ukraine crisis

Ebola outbreak in Congo now world's second biggest ...

W.H. Globalists push Trump to back off China tariffs

Punchbowl

"The job of the Federal Reserve Bank is to take away the punch bowl just as the party gets started" -- William McChesney Martin

Translation: The Fed causes recessions just so it can fix them.

It is my contention that the Fed's charter is too narrow -- maintain full employment and  low (2%) inflation. Today, both these goals are being met, yer the Fed seems bent on increasing interest rates (taking away the pinch owl) to prepare for (cause?) the next recession.

However, the interest rate differential between the U.S. and the rest of the world is now so great that the Fed, by strengthening the dollar so much, is impacting foreign trade and working at cross purposes with Trump's tariff agenda. These rate increases are also killing home and auto sales and making our Treasury's job of financing our debt much more difficult ... particularly since it neglected to extend its term during the previous administration.

Conclusion: If the Fed continues to raise interest rates, the party will surely be over for quite some time. Also meaning that the Fed has its thumb on the political scale ... as Trump is implying.