06/05/2024
Back in late 2023, the financial markets turned overly vivacious to start the 2024 year. This led to a significant loosening in financial market conditions. Expectations moved the market remarkably, and likely more than what the economy and Fed wants or needs to keep credit flows, customer spending, hiring and capital expenditures in-check. The recent inflation reports are helping to reverse some of that loosening, bringing conditions back towards levels that are more conductive to reigning in growth and inflation. Take a look at the graph below to see how financial conditions have loosened as Fed funds remained restrictive.