Market Commentary Phillip Cochran
Investment Services Manager, Series 7 Licensed Broker

Unemployment fell to 9.7%. That is good news. But is it really a reliable indication of an economy improving or just the opposite, representing the frustration of the unemployed no longer seeking employment. Retail sales remain slow. Consumers seem to be waiting for job security before spending, and employers are waiting for increased retail sales before adding jobs. Yesterday the Fed raised the discount rate by 25bps. Immediate reaction was a steepening of the yield curve but the curve flattened by close of day and opened even flatter this morning. This move by the Fed could merely be a step toward returning to their policy of a 1% spread above the target rate. Inflation remains low. Core inflation is non-existent, suggesting that the target rate is not to move any time soon.

I believe the light at the end of the tunnel is still switched off for now.