Well, as expected, the Fed did not raise rates yesterday. Further, it came out with what was perceived as a much more dovish statement than anticipated, essentially declaring a pause in rate increases. In response, markets cheered. Beyond that, the Fed issued a deliberately obscure piece on balance sheet normalization that, without making any commitments, stated that the Fed now expects to maintain an “ample supply of reserves.” Again, markets cheered.

With the brutally cold weather locking down large parts of the country, the hope today is that the Fed will heat up the markets by both holding rates steady (as expected) and dialing back the liquidation of its balance sheet. Personally, I think investors should be careful what they wish for. If the Fed really does slow the quantitative tightening process, in conjunction with keeping rates steady, it could be a sign of an even colder economy ahead.

I found a really interesting chart in my e-mail this morning. I think its implications extend well beyond what it actually shows, and so I thought it worth sharing. The chart is below, but the full version and discussion can be found on howmuch.net.

Although the government shutdown has now ended, several of last week’s scheduled economic reports were not released, and it is still undetermined when they will be made available. Similarly, this week’s data releases may also be affected.

Is the government shutdown becoming normalized? I discussed this and more (my segment begins at 1:38) this morning on Yahoo Finance Live: On The Move. 

Yesterday, we talked about what consumer confidence might be telling us about the economy. It seems the current news is great—with confidence very high and up over the past year. But a closer look at the data showed that there are some real signs that the future might be considerably less cheerful than the current data would suggest.

As I’ve noted before on this blog, in many ways, the current economy is as good as it gets. It is bound to moderate or roll over—only to see things get even better. This scenario has been going on for some time now, to the point where I want to think about what could really signal a downturn. Could consumer confidence be one of those signals?

In a previous life, I was involved in real estate, including properties catering to the growing older population. Those properties were divided into three main categories: active adult communities, aimed at the vigorous, relatively young retirees; assisted living communities, aimed at those who wanted some extra help; and skilled nursing facilities, aimed at those who needed full-time care. Respectively, they were known in the industry as the go-gos, the slow-gos, and the no-gos.

Last week was a busy one on the economic front, but several reports were not released due to the government shutdown. As such, I will report on expectations, but we won’t know how the actual data has come in until the government reopens. Where possible, I will comment on anything we do know.

I wrote about the big-picture effects of the government shutdown the other day, which are likely to be longer term. As it continues, though, the shorter-term effects continue to pile up. As such, it is time to take a look at what the shutdown means now and over the next month or so.

Economic questions come in cycles. Recently, with the relatively hawkish tone of the Fed and the turmoil in Washington, DC, economic worries have spiked again, and the velocity of money has become a hot topic. I last touched on this in early 2017. It has been one of the most viewed posts since then, so clearly it is time for an update.

With the failure of the Brexit vote and the ongoing U.S. government shutdown, we find ourselves in a state of politics as unusual. Let’s take a closer look at each to see what I mean.

Should we care about the Brexit vote? In a word, yes. What happens in the vote today matters to us as both U.S. citizens and, especially, investors. It will help determine what the future of the world economy looks like, and it could potentially shake up the global financial system.

Last week was a busy one on the economic front, as we started the new year and covered a wide range of economic activity. This week’s data starts with prices and whether inflation is picking up.

We’ve been talking all week about the economy, the markets, and the risks therein. But looking back on these posts, there seems to be a glaring hole: the government shutdown.

That absence wasn’t an accident. In the longer term, which is how investors should look at things, the current government shutdown very likely won’t matter. As such, it hasn’t warranted a discussion. The shutdown will last until it’s over. Then, we will move on, just as we have done with past shutdowns.

Market risks come in three flavors: recession risk, economic shock risk, and risks within the market itself. So, what do these risks look like for January? Let’s take a closer look at the numbers.

Despite last month’s political and market turmoil, the economic news remained solid if somewhat mixed. Both consumer and business confidence pulled back a bit but remained at healthy levels overall. Hiring rebounded strongly after weak results last month. This rebound should help maintain consumer and business confidence going forward, despite the December pullbacks. Finally, longer-term interest rates, which had been a concern after Fed rate hikes and hawkish commentary, also moderated.

As I do every month, it’s time to take a look back at what happened in the previous one and what it could mean going forward. We have a lot to cover.

Last week was a short but busy one on the economic front, despite the New Year holiday. This week, we’ll see reports on a wide range of economic activity.

We closed yesterday’s post with the observation that although current conditions remain good on the economic front, there may be clouds on the horizon. As such, it could be time to start thinking about a pending recession. Today, I want to take a deeper dive into that. But let’s start with why things are still good.

This morning, the major headline was the downward revision in Apple’s revenue projection—the first time this has happened in well over a decade—on lower sales in China. The reaction to this news was apocalyptic, with markets around the world selling off. But why on earth are slower cell phone sales—from only one company—such a big deal? And do these events mean the downturn will continue to get worse?

Will the Fed continue to raise rates in 2019? I discussed this and more (my segment begins at 50:34) this morning on Bloomberg TV's Bloomberg Daybreak: Americas. 

December was another bad month in a string of bad months, with U.S. markets down about 10 percent and international markets faring only a bit better, down 5 percent to 6 percent. A combination of bad news, from a government shutdown, to the ongoing trade war, to the Fed's decision to raise rates, was enough to shake investor confidence just in time for the holidays. Still, the fundamentals continue to look strong. Has the damage been done? Stay tuned to my Market Thoughts video to find out.