Imports are way, way up
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On the program today, we'll talk about the markets, stock and labor both, a corporate rebrand, and the Wall Street Bull. From American Public Media, this is Market Place.
In Los Angeles, I'm Kyle Rizdall. It is Tuesday today, the 15th day of September. Good as it always is. Have you along, everybody? You know, one of the realities of the Kevin Walsh led Federal Reserve is that we kinda don't really know what the central bank is gonna do when it wraps up its two day meeting tomorrow. Lack of forward guidance at al. But just 'cause we don't know doesn't mean Wall Street doesn't have an expectation, a ninety plus percent expectation. That Warsh et al. will raise their benchmark interest rate by a quarter of a percentage point. So money will get more expensive. That, of course, will trickle out through the economy, and in that way that capitalism works is going to make its way back to Wall Street.
Marketplace's Mitchell Hartman gets us going.
So what could happen the day after or even the afternoon after the Fed hikes its benchmark interest rate?
We probably shouldn't expect a large and immediate impact of a rate hike on stocks since it's already priced in.
Bill Mers at US Bank Asset Management says capital markets have been anticipating higher rates for a while, and once the Fed starts, it's not usually one and done.
Markets are already pricing in three to four rate hikes by next summer.
It's an open question how much rate hikes might drag on business investment and consumer spending, which are key drivers of corporate profits and stock prices. But up till now they've held up strongly.
Jan Grone, chief economist at Societe General, has an altogether less sanguine view of what's coming.
I mean it's definitely not price into stocks. So we'll see what's gonna happen tomorrow.
Grone says with a new Fed share who hasn't established his credibility yet and shuns forward guidance about interest rates
The market is just not really believing the Fed that they really have the the willingness to go all the way.
He thinks investors will eventually get the message, with stock prices taking a hit later this year when he predicts inflation will still be high, inducing the Fed to hike rates again. Equity analyst Jeffrey Roach at LPL Financial has looked at the last thirty years of Fed rate hiking. What he's found mirrors something a former Fed chair once said about taking away the punch bowl. The punch in the bowl is low interest rates, the lubricating beverage that brings investors to the stock buying party. When rates go up, you get the punch bowl taken away, you complain for a little bit, then after a while you just move. Move on. Historically, stocks tend to fall for a few months, but twelve months after that, they're back in the black as companies and consumers adjust to higher rates.
I'm Mitchell Hartman for Marketplace.
Well, speaking of which, Wall Street today stocks down, bonds up, yields that is, oil up as well. Details, numbers when we get there.
Most of the time when we talk about the American labor force, we talk about it in the aggregate, the overall unemployment rate, the total number of new jobs created. You get it, right? The US workforce, though, is not a monolith. 170-ish million people in different categories and different places with vastly different occupations. And it turns out that half of that labor force right now, the half or so without college degrees, is having a very different year than the other half. Dad Levinon wrote about it the other day. He's the chief economist at the Burning Glass Institute. Welcome to the program. Thanks for having me. Uh you have written and we have all heard and we've reported on this program um that it's uh it's been a tough year for recent college graduates.
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