Chatter On A Platter

The biggest news of the day may well have been technical, insofar as the 1300 support level did not hold in afternoon trading today. More on that in our other areas below and on today's video.

In fundamentals news, Philadelphia Fed president Charles Plosser told CNBC that the Fed's stance had not changed, regardless of what the market has said. He believes Yellen's statement was clear. Any course changes will indeed be data driven.

Plosser is one of our favorite Fed annoyances, speaking not only out of turn but out of both sides of his mouth. He is a fiscal hawk and sometimes forgets that there is such a thing as political economy as well as financial economy. (Translation: reality versus theory.)

In his interview today he said that he wanted inflation to creep up. OK... we agree with that. In the next breath though, Plosser said that interest rates should go up to 3% by the end of 2015 and 4%(!) by the end of 2016.

In a statement he made earlier this month, he believes that the financial crisis that set off the Great Recession caused more damage than previously estimated and that growth may never return to normal.

Well, if you were worried about that last item, would you be thinking it's a good idea to tighten up on the cost of money?

And, if you were hoping for an increase in inflation, would you be predicting or encouraging higher interest rates?

In other matters, President Obama's comment yesterday calling Russia a regional power naturally sparked a riposte. One of Russia's ministers said "Yes we ARE a superpower!" You know, if you have to say it, you ain't it.

But the controversy stays alive and that is a positive for gold.

Once again, U.S. data released today was mixed.

American durable goods orders came back strong in February, but a drop in a gauge of planned spending on capital goods surprised economists, (no surprise there!), pointing to sluggish economic growth next quarter.  

The services PMI for March - released overnight - showed that economic activity sped up at a faster pace than in February as that large sector of the American economy shifted gears up.

We are seeing a lot of growth followed by mini-consolidation followed by growth, etc.

Thinking out loud here... and circling back to other writings we've done: 2% is surely much too low an inflation rate. We think that the better range is 2.4 to 2.7%. If we were real risk takers, we'd say even 3%.

As always, wishing you good trading,