Stocks Up Again, On Pace To Close Higher For The Week  Image: Bigstock Stocks closed higher again yesterday with all of the major indexes up by 0.60% or more. With only one more trading day to go, they are all up for the week as well. Fed Chair, Jerome Powell, yesterday, reiterated the Fed's commitment to tackling inflation, saying they "will keep at it until the job is done." This echoed other Fed officials in the last few days and weeks which essentially have been saying the same thing. He did not say specifically how high they will raise rates at their next meeting on September 20-21. But the odds are currently at 75% that it will be 75 basis points, which would put the midpoint for the Fed Funds rate at 3.13%. What happens after that remains to be seen. But with several other Fed members suggesting we could be over 4% early next year (after September's meeting, there's another one in November, then December, and then the first one in 2023 is February). So it looks like they will keep raising until then. Especially given Powell's comments yesterday, saying that "history cautions strongly against prematurely loosening policy." The market clearly liked the tough talk on inflation since many doubted the Fed's resolve. And high inflation is far worse for the economy than higher interest rates. That being said, Mr. Powell reiterated that the Fed's goal is to achieve a "soft landing." With a robust jobs market, strong consumer demand, positive GDP forecasts for the second half of the year (Q3 right now is estimated to come in at 1.4%, which is way better than Q2's -0.6% and Q1's -1.6%), and evidence that peak inflation is behind us, there's plenty of reason to believe that we can head much higher from here. At least getting back to where we were 3 weeks ago in mid-August. In other news, Weekly Jobless Claims came in better than expected at 222,000, down -6,000 from last month's downwardly revised 228K and views for 240K. Today we'll get Wholesale Inventories. And the European Union energy ministers will be meeting to discuss rising energy prices. Yesterday, the European Central Bank (ECB) raised rates by 75 basis points to address their soaring inflation. So it will be interesting to see what they do on energy prices. In the meantime, U.S. stocks are looking better with each day. And they won't need to do much to close higher for the week. But if they can notch another up day today, that will be an exclamation point on a fantastic rally this week. And it will provide additional confidence that the upside rally has more to go. Best,  Kevin Matras
Executive Vice President, Zacks Investment Research | 
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