Richard Fisher on Valuations, Fed Policy, and Labor Market Concerns

Market Valuations and Fed Commentary

• 💡 Richard Fisher notes that Fed Chair Powell's comment on equities being "fairly highly valued" is an objective statement, as most observers agree that markets are richly or overpriced.
• 📈 He contrasts the current market close of 6,666 with the S&P's bottom of 666 on March 6, 2009, highlighting a tenfold increase in investor returns.
• ⚠️ Fisher cautions those who complain about the Fed, suggesting they should be mindful of the support provided.
• 📌 He observes that valuations are very strong and concentrated in a few companies.

Federal Reserve's Policy Path

• 🎯 Fisher believes the Fed is navigating a challenging path with downside risk on employment and upside risk on inflation.
• ✂️ He accepts the quarter-point rate cut as a response to uncertainty and does not rule out further cuts, though they may not be momentous.
• 🗣️ He found both Powell's and Steve Myron's speeches to be predictable and unremarkable.

Small Business and Labor Market Insights

• 📊 The National Federation of Independent Business (NFIB) surveys are a key indicator for small and medium-sized businesses, which create 80% of American jobs.
• 🧑‍💼 Current NFIB surveys show small businesses are not complaining about access to credit, and their cost of credit has slightly decreased.
• ⚠️ The primary concern for these businesses is the availability and retention of labor, exacerbated by immigration policies.
• 📉 A positive sign is the fall in the percentage of firms planning to raise average selling prices, though its impact on consumers remains to be seen.
• 🧐 Fisher emphasizes the need to monitor the labor situation closely as it is crucial for job creation in America.