Based on the 30% drop in oil prices and the 18% drop in gasoline prices over the last month, we are forecasting that CPI will be negative .18% for June

We are reiterating our forecast of 3 Fed rate cuts over the next year despite the hawkish press conference by Warsh and a dot plot that indicates 2 rate hikes this year. In fact, we interpreted Warsh’s press conference as very bullish due to the potential for reforming the Fed. Specifically, Warsh softened up the arbitrary 2% target by focusing on the “left side of the decimal” target of 2.0%. This implies the Fed’s de facto absolute ceiling for inflation is 2.9%. This is a critical update...

We are increasing our S&P 500 index target to 9,000 due to the announcement of the opening of the Strait of Hormuz pursuant to a peace agreement to be signed on June 19th. S&P 2027 earnings estimates have risen 12% since we established our 8,000 year-end 2026 target in December and we are using the same 23x fair value multiple that we used in our original target. We are currently not experiencing a stock price bubble but rather an earnings estimate surge as the AI boom causes a dramatic...