Larry Wachtel Fed Quotations

If the Fed is seeking to slow the economy down that's always the conundrum,

If the Fed even hints that it will stop raising rates, that would be a major catalyst to move the market higher.

It doesn't tell you anything in terms of the fundamentals. I think there will be a bet made tomorrow (Tuesday) and early Wednesday that the Fed goes 50 basis points (a half-percentage point). If it pays off, I think there will be a trading flurry.

We have good earnings today, but there's just too much good economic news. We're increasing the likelihood of a rate hike in June. The data are coming in stronger than expected, so the Street is expecting another hike. The better the news, the more likely the Fed will tighten. It's a strange phenomenon that good news can be bad news.

Attention will be focused on the statement that follows the 2:15 p.m. ET rate announcement, as it will give us a better indication on the Fed's future course of action. Noteworthy is that the tendency has been for the market to rally ahead of the Fed meeting and to sell-on-the-news after the announcement, ... While the market is advancing, it is on light volume due to this being a Monday in the slow month of August in front of tomorrow's economic policy uncertainty.

Once we get to April and the first quarter earnings are reported -- and I think they're going to be pretty good -- (that) could be helpful. I doubt if you'll get anything out of the Fed meeting.

There's a cautious backdrop (on Wall Street). We're heading to that glide path toward the Fed meeting. I think there has been a gravitation toward the cyclical stocks and away from the blue chips. And I think we'll continue to see movements into the papers and the metals.

It's a catch-22. If any of these numbers comes in too strong, it's going to hurt stocks because it means the Fed is going to keep hiking.

The Dow components are weak because the Fed is threatening to slow the economy down. Its cyclical components are the ones that are most sensitive to that.