Good Thursday AM,

Bonds are up on the day, which is a great sign following the Fed meeting yesterday. I was surprised by how bullish the Fed spoke about the economy yesterday. Again he said that the economy is strong enough to endure several rate increases. I believe most of us have a much better and realistic point of view about the negative direction the economy is headed (at least the consumers do). Inflation will continue to drag on the economy. Oil prices will slow summer travel. We have not even touched on food prices and shipping costs! The Fed will not be able to follow through with his rate increase plan. The spread between the 2 year and 10 year spread is now down to 20 bps. The yield curve flattened with just this one Fed increase. Remember… the last 7 recessions were preceded by an inverted yield curve. We are just 20 bps from inverting. I VERY reluctantly suggest floating for now. I believe bonds will improve over the coming days. This forecast will require oil prices to stabilize. Today oil is up almost 8% which is creating a drag on the rally.

Please remain safe and healthy, make today great.