Today should be all about whether the FOMC can stick to its oft-repeated stance that they’re not worried about inflation and interest rates. They way things look this morning, the market isn’t buying it.
And, there’s no reason it should. With yields continuing to push through resistance, the writing is on the wall.
Rising rates might not affect all those megacap companies that can and have borrowed all they need at historically low rates or issue stock at inflated multiples. But, they will affect nearly every other segment: small and mid-cap public companies, small businesses, individuals with credit card debt, home buyers, car buyers…the list goes on.
Unless oil and gas prices come down sharply in the next 30-45 days, push has come to shove. This morning’s EIA inventory data will attract extra scrutiny, as it should. If the oil/gas rally is to end, we should see some decidedly bearish signals.
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