2017

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A good example from today´s speech by Philly Fed president Patrick Harker: Growth for 2017 so far is more or less what we expected. The first quarter was relatively weak, which has been the case for first quarters over the past several years. That’s what we’ve come to expect at this point, so it’s not

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There’s no “Conundrum”

As recounted by Greenspan in chapter 20 of his memoir “The Age of Turbulence”: “What is going on? I complained in June 2004 to Vincent Reinhart, director of the Division of Monetary Affairs at the Federal Reserve Board. I was perturbed because we had increased the federal Funds rate , and not only yields on

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Durable Goods Orders: “Dangerously Boring”

What makes Durable Goods Orders a “high profile” indicator is that it can foreshadow significant changes in economic activity sooner than other statistics. It is important to keep in mind, however, durable goods orders are highly volatile month-to-month due, in large measure, to sudden large changes in orders for defense goods and aircraft. In order

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The Fed Becomes a Demoralizing Embarrassment

The U.S. Federal Reserve is tightening its noose on the U.S. economy, despite being below its 2% PCE inflation target, and despite the sluggish wages that define the American job scene: real hourly wages are down in Q1 (the latest reading) and are up 3.1% in the last 10 years. However, the picture may be
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Quiet week after Fed normalization, economy can do nothing but slow

Week ending Friday 23rd 2017 The small rollercoaster on which short term interest rate expectations have been riding continued early this week as in a pre-market speech on Monday Bill Dudley reaffirmed the consensus FOMC case for one more rate rise this year. What else could he say so soon after the permanent members (had

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The Fed embraces the Phillips Curve to everyone´s chagrin

And on they go in the wrong direction. In the news conference Wednesday, however, Yellen defended the Fed’s policy of gradual rate hikes as forestalling a situation that could be much more damaging for disadvantaged groups. “We want to keep the expansion on a sustainable path and avoid the risk that … we find ourselves

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In a speech today, New York Fed president Dudley, following Yellen´s press conference last Wednesday suggested that current levels of unemployment and inflation were a “pretty good place to be”! He also felt that the US economy was “close to full employment” and, despite inflation being a “little lower than the Fed would like”, he

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Week ending Friday 16th 2017 Inflation data, of all varieties, certainly do not support the Federal Reserve´s tightening plans. It seems even some at the FOMC are beginning to realize that fact. While in March there was just one member who thought rates should end 2017 at the 1-1.25% range, after the June meeting that

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NGDP Outlook June 15th 2017

Market-implied NGDP expectations fell from 3.9% year-ahead before the recent Federal Reserve policy statement, to just above 3.8% after. A disappointing result and a stark way of quantifying the restrictiveness of current Fed policy. The Fed had announced months ago that four rate hikes would be done in 2017, and yes, they really mean it.

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