Wednesday , October 16 2019
Home / Tag Archives: Interest rates

Tag Archives: Interest rates

Head Faking In The Empty Zoo: Powell Expands The Balance Sheet (Again)

They remain just as confused as Richard Fisher once was. Back in ’13 while QE3 was still relatively young and QE4 (yes, there were four) practically brand new, the former President of the Dallas Fed worried all those bank reserves had amounted to nothing more than a monetary head fake. In 2011, Ben Bernanke had admitted basically the same thing. But who was falling for it? The stock market, sure. Investors on Wall Street are still betting as if it will work any day now. The financial media,...

Read More »

Streaking Markets–Euro has a 4-day Advance in Tow and the US 10-Year Yield, a 7-day Drop

Global growth concerns spurred by disappointing PMI data and broadening trade tensions, as the US prepares to act against Europe to the full extent that WTO allows, drove the capital markets over the past week.  The dollar was mixed.  The yen, euro, sterling traded higher, while the Canadian dollar, Swiss franc and Swedish krona weakened.  The short-end of the US curve that had shown some doubts about another Fed cut this year swung hard toward possibly two more cuts. The US two-year...

Read More »

GDP Estimates Collapse After Dismal ISM Report

GDPNow and other GDP estimates took a dive today on weaker than expected manufacturing reports. The GDPNow forecast for third-quarter GDP fell to 1.8% today on weak economic reports. Gold and Treasuries Rally GDP Estimates Q3 GDP growth estimate changes on FridayMorgan Stanley ⬇️ from 2.1% to 1.5%Macro Economic Advisors ⬇️ from2.2% to 1.6%NY Fed ⬇️ from 2.24% to 2.04%Atlanta Fed ⬆️ from 1.9% to 2.1%— UPFINA (@UPFINAcom) October 1, 2019Oxford Estimate Real Final Sales The...

Read More »

Currency War: Rising Dollar & Trump’s Retaliation

The ECB cut rates further into negative territory and the BoJ is expected to do the same. How long before Trump reacts? Japan Poised to Escalate Currency War A Bank of Japan board member says risks risks are growing and the BOJ Ready to Ease Again if Price Momentum Lost. “My recent concern is that, amid significant downside risks concerning overseas economies, negative effects would be exerted on prices,” Takako Masai said in a speech to business leaders in Tsu, Mie Prefecture,...

Read More »

Since 2000 Wage Growth Has Barely Grown, If You Even Got That Much

Women are slowly catching up to men in median wages but growth has been pathetic across the board. BLS data on real wages shows women are slowly catching up to men. That’s the good news. The bad news is real wages for women have only risen at slightly over 1/2 of 1 percent per year for 19.5 years. Men performed even worse. Real wages for men have risen at a pathetic rate of about 1/4 of 1 percent per year in the same period. The featured images is from a set of Interactive BLS...

Read More »

QE Debate: Powell’s Comment On “Resuming Balance Sheet Growth”

Some interpreted Powell’s statement to mean more QE. There’s a strong clue Powell meant something else. OK, but …. What did Powell Mean? Reminder: it is normal for the Fed's balance sheet to grow gradually. This is what he means. Not resumption of QE, as some have assumed. https://t.co/vUC3peXwrz— (((Frances Coppola))) (@Frances_Coppola) September 18, 2019I confess, I thought Powell was talking about QE, but I did not see the exact quote. Powell said “organic growth”. I believe...

Read More »

Black Monday – Can It Happen Again?

The 1987 stock market crash, better known as Black Monday, was a statistical anomaly, often referred to as a Black Swan event. Unlike other market declines, investors seem to be under the false premise that the stock market in 1987 provided no warning of the impending crash. The unique characteristics of Black Monday, the magnitude and instantaneous nature of the drop, has relegated the event to the “could never happen again” compartment of investors’ memories. On Black Monday, October...

Read More »

Job Report: Badly Misses Estimates As Economy Slows

The jobs report dramatically missed expectations today, especially with private jobs. ​Initial Reaction – Huge Misses The Econoday consensus was for a payroll expansion of 163,000 jobs, 150,000 of them private. The ADP forecast was 195,000 jobs.ADP missed consensus by 65,000 jobs.Econoday missed consensus by 33,000 jobs.Econonday missed the private consensus by 54,000 jobs.The Econoday lowest estimate missed the private consensus by 40,000 jobs.A 34,000 surge in government jobs was...

Read More »

Simple Payrolls Right Now, Before Getting To The More Complex Issues

Where things stand right now is actually a pretty simple matter. How and why everything might change, as well as how and why we got here, those are more complex issues which depending upon your understanding may not lead to a clear picture of conditions. Right now, we are told, there will be just the one rate cut, maybe a second one coming up, because the US economy while not as robust as last year is still very strong underneath everything else. This mainstream view is predicated on only one...

Read More »

Just Who Was The Intended Audience For The Rate Cut?

Federal Reserve policymakers appear to have grown more confident in their more optimistic assessment of the domestic situation. Since cutting the benchmark federal funds range by 25 bps on July 31, in speeches and in other ways Chairman Jay Powell and his group have taken on a more “hawkish” tilt. This isn’t all the way back to last year’s rate hikes, still a pronounced difference from a few months ago. The common forecast relies entirely on the subjective interpretation of the labor market....

Read More »