August 29, 2016

In “Years of Fed Missteps Fueled Disillusion with the Economy and Washington”, Jon Hilsenrath gives his contribution to the “Great Unraveling” series. He starts off writing: In the past decade Federal Reserve officials have been flummoxed by a housing bubble that cratered the financial system, a long stretch of slow growth they failed to foresee and inflation persistently undershooting their goal. In response they engineered unpopular financial rescues, launched start-and-stop bond buying and delayed planned interest-rate boosts. “There are a lot of things that we thought we knew that haven’t turned out quite as we expected,” said Eric Rosengren, president of the… Read More

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July Personal Consumption Expenditure and Personal Income were both in line with expectations. Although June growth was revised up a tiny amount the trends of the last several months were unbroken. Nominal Expenditure has accelerated to 3.8% YoY but only financed by a lower savings rate due Personal Income running at a 3.2% trend. Perhaps confidence amongst consumers has risen, but that does not seem to be the case looking at surveys. While Nominal Disposable Income is running a bit closer to Nominal Personal Expenditure, Disposable Income per capita growth, is in line with nominal weekly wages at an ugly… Read More

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