A Bullish Scenario

Here’s the simple thesis I mentioned on last night’s show: a steady, unchanged, federal funds rate from our central bank—not higher rates, not lower rates—is the best possible scenario for the stock market.

Going back to the early ‘90s, the S&P 500 boasts a bullish track record during periods when the Fed sits on its hands.

Since last June stocks are up 23 percent. From March ‘97 to September '98, the S&P was up 35 percent; January '96 to March '97, up 27 percent; September '92 to February '94, up 17 percent. (This info comes courtesy of distinguished veteran mutual fund reporter Chet Currier.)

I believe Fed rate hikes are off the table now. The economy is strong and starting to hum again. Two percent growth, possibly even 3 percent, is just around the corner. Inflation looks contained. Tax rates are going to stay low.

Goldilocks is knocking the permabear recessionistas out of the water yet again.