The Federal Reserve apparently is in no rush to raise interest rates, according to the minutes from the Federal Open Market Committee meeting in January which were released Wednesday afternoon. The minutes reveal detailed debate about when to begin raising rates and concern among some Fed officials about raising rates too soon.
"If there's anything holding the Fed back at the moment from hiking rates it's the inflation numbers being still so disappointingly low,” says Michelle Girard, U.S. Chief Economist at RBS, adding that if “patience” comes out of the March statement it sets up a June rate hike.
Congress awaits Fed Chair Janet Yellen's semi-annual testimony next week. Girard says that testimony will be even more important than today’s minutes.
“That will be an even more up to date interpretation or view of what the Fed is thinking,” she says, noting that today’s minutes won’t include thoughts on the most recent non-farm payroll report.
All three major stock indices were lower through the first half of the day as investors waited not just for word from the Fed but also any developments out of the ongoing Greek debt negotiations.
Fast Food Consumer
Jack in the Box (JACK) is the last casual dining establishment to report quarterly earnings and the stock surged on the news, up more than 6% today. Yahoo Finance’s Jeff Macke says these types of restaurants are “closest to the bleeding edge of economic growth” - even more than retailers.
“As usual, the good companies have a knack for finding customers who want to spend money,” Macke says of Jack in the Box noting that McDonald’s (MCD) and Wall Street darling Chipotle (CMG) could use some pointers when it comes to consumers opening their wallets.
Citi’s climate wager
Citigroup (C) has doubled down, literally, on its commitment to climate change. After pledging $50 billion to the cause in 2007 the company announced a $100 billion investment over the next ten years.
Yahoo Finance Columnist Rick Newman notes, “That’s a lot of money and what that says to me is that Citibank thinks there’s actually money to be made here.” He says they must see opportunity in things like wind and solar power and the growing electric vehicle industry.
For his part Jeff Macke, while noting the importance of charity, would rather Citi focus on banking and getting its stock price higher.
Under Armour signs ‘The Greatest’
In their latest bid to gain ground of athletic giant Nike (NKE), Under Armour (UA) has announced the signing of Muhammad Ali to an endorsement deal. “For guys over 40, Ali sells a lot of stuff,” says Jeff Macke. But is an aging star of yesteryear the right face for Under Armour who already counts Giselle Bundchen, Tom Brady, Stephen Curry and Jamie Foxx on its endorsement roster?
“It’s just an arms race for the high-priced endorsers,” Rick Newman argues. “All the money is going into the advertising and the marketing and it doesn’t go into the product… The price of the products inevitably will go up for them to keep the margins while spending all this extra money. So that’s not in consumers’ interests.”
Macke thinks Ali brings enough name recognition at what he thinks probably isn’t much cost and gives the deal a thumbs up.