The job of Wall Street economists is simple: Namely, to spin the economic weather— come rain, shine, sleet or snow—so that it is just right for the stock market.
Since nothing could possibly go wrong, the message is everywhere and always the same: Hit the “buy” key and don’t sweat the small stuff!
The recently surging interest rate complex is a perfect case in point. Bubblevision has been thick as flies with economists and strategists averring that rising rates are actually a good thing because they signal that the US economy is stronger than an ox.
Accordingly, while you might want to fade the bond funds—go right ahead and back-up the truck to the equity pits and load up on some ETFs, too.
We call this ritual incantation because its saliency is a function of repetition, not empirical reality. By any common sense definition of the word and the hard data, there is nothing “strong” about the current US economy; and there is a lot that looks more like weak, old and exhausted at the 111 month point of the second longest and the overwhelmingly weakest business cycle in modern history.