Alan Kral Fed Quotations

I think what we saw yesterday (Tuesday) was a bounce in the bear market. It could continue. There's no question there are going to be sharp rallies all the way along in here. But I think the trend has been as long as the Fed has been active, we've basically seen a down market with some rallies in it.

I think the Fed is hanging its hopes on a couple of things. The bond price has dropped and yields have gone up and it is doing the job for them. . . the economy as a whole is slightly slower in the second quarter than it was in the first. There's hope that it will tail off to a more sustainable rate.

I think people are just not going to respond to what the Fed does if it's only 25 basis points (a quarter point). In order to have any kind of impact he has to change people's actions, he has to change what people do.

Once we get past the CPI, we'll be right into Fed watch. Just because the numbers report a slower economy doesn't' mean that we're looking at anything more than the natural seasonal response.

Probably there won't be any peace until after the Fed has spoken. This is a very sensitive time in the market and you'd better be comfortable with the stocks you own.

We think the rally in Nasdaq over the past two weeks is really a relief rally. The relief is they don't think the Fed has to go any further.

The Fed made it reasonably clear they will raise rates again. The Fed is impacting the Dow stocks and not impacting the Nasdaq stocks.

The big risk with the stocks that have done well recently is that the economy is so strong that it can't continue, and when it slows down, that will hurt earnings. Secondly, when the Fed finally acts to slow the economy and bring down inflation, it will be a double-whammy to earnings - and it will be an extra big whammy to those stocks that have been in the situation where they really need strong earnings growth going forward.

Everyone is waiting to see if the Fed does anything, and if it doesn't, what it says about the economy over the rest of the year.