Wednesday , June 19 2019
Home / Tag Archives: Jay Powell

Tag Archives: Jay Powell

When Verizons Multiply, Macro In Inflation

Inflation always brings out an emotional response. Far be it for me to defend Economists, but their concept is at least valid – if not always executed convincingly insofar as being measurable. An inflation index can be as meaningful as averaging the telephone numbers in a phone book (for anyone who remembers what those things were). If you spend $1,000 a month on food for your family, and food prices rise 6% generally that’s an additional $60 that has to come from somewhere. It is...

Read More »

All Of US Trade, Both Ways, And Much, Much More Than The Past Few Months

The media quickly picked up on Jay Powell’s comments this week from Chicago. Much less talked about was why he was in that particular city. The Federal Reserve has been conducting what it claims is an exhaustive review of its monetary policies. Officials have been very quick to say they aren’t unhappy with them, no, no, no, they’re unhappy with the pitiful state of the world in which they have to be applied. That’s not quite how this central bank quandary is being characterized, of course....

Read More »

Bills, Beige, And the Consequences of the Disappeared Labor Shortage

Early last month, the Bureau of Labor Statistics (BLS) reported that the unemployment rate in the United States had fallen to just 3.6%. It was the lowest in half a century, seemingly an amazing feat for the most puzzling boom ever conceived. Everyone says it is going gangbusters, but is everyone saying so simply because everyone says so? This one statistic is the key piece of evidence for something more tangible. The problem is that it is not unassailable. There are flaws in its design,...

Read More »

Copper And Oil Walked Out On The Last Puppet Show

Where have you gone, green shoots? The Fed turned dovish, a bunch of transitory factors, and, above all, so much Chinese stimulus. That’s what got everyone through the winter. Markets were truly harsh to end 2018, a sharp slap in the face after all year the unemployment rate. One of the big ones that seemed evidence for green shoots was copper. Once the Fed “pause” was finalized in whispers, this one commodity price began its resurgence. And it wasn’t alone, either. Copper was joined by oil,...

Read More »

Janus Powell

Again, who’s following who? As US Treasury yields drop and eurodollar futures prices rise, signaling expectations for lower money rates in the near future, Federal Reserve officials are catching up to them. It was these markets which first took further rate hikes off the table before there ever was a Fed “pause.” Now that the Fed is paused, it’s been these same markets increasingly projecting not just a rate cut or two but an entire series of them. Playing from behind once more, Chairman...

Read More »

How Do You Get A September Rate Cut?

When the eurodollar futures curve first inverted a year ago in the wake of May 29, 2018, it was the market beginning to hedge against serious and rising risks of something that would force the Federal Reserve to turn around. When that might happen, or how many cuts would eventually follow, those were questions the immediate inversion couldn’t answer. All the curve said at that point was a serious chance Jay Powell was going to be forced into an involuntarily U-turn at some indeterminate...

Read More »

Irony of Ironies; It’s Been Federal Funds Leading the Bond Yield Plunge The Whole Way

Tomorrow will be one year since the global monetary system broke. Or, for the sake of accuracy, broke again this for the fourth time. There had been warnings going all the way back to September 2017 about how all was not right in the realm of reserve currency. These would take on added importance at the outset of 2018, an outbreak of global liquidations that swept up even stock markets which were supposed to be giving central bankers their much-desired parade after a decade of struggle. In...

Read More »

What About Copper?

The FOMC hates the bond market. Hates everything about it, especially how it tells these Economists they don’t know what they are doing. Monetary policy being little more than a vanity project, that’s not going to work for the people practicing it. OK, if you don’t like bonds then how about something else besides the stock market? Some independent corroboration of one side or the other. One of the first prices to sniff out the end of Reflation #3 was copper. When the Communist authorities of...

Read More »

The Transitory Story, I Repeat, The Transitory Story

Understand what the word “transitory” truly means in this context. It is no different than Ben Bernanke saying, essentially, subprime is contained. To the Fed Chairman in early 2007, this one little corner of the mortgage market in an otherwise booming economy was a transitory blip that booming economy would easily withstand. Just eight days before Bernanke would testify confidently before Congress, the FOMC had met to discuss their lying eyes. The eurodollar futures market was, in the...

Read More »

Global Doves Expire: A Hundred Years of US IP Give Bond Market Another Win

The Federal Reserve has been maintaining statistics on American industry for nearly as long as there has been a Federal Reserve. The first entry in the data series on Industrial Production is for the month of January ’19. Not 2019 but 1919. With over a hundred years of relatively consistent data, matching up very well with overall trends in the US economy over an unusually long period, it’s no wonder IP is at the top of the list of key indicators. The NBER cites it as one narrow economy...

Read More »