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Tag Archives: rate hikes

Data Dependent: Interest Rates Have Nowhere To Go

In October 2015, Federal Reserve Vice Chairman Bill Dudley admitted that the US economy might be slowing. In the typically understated fashion befitting the usual clownshow, he merely was acknowledging what was by then pretty obvious to anyone outside the economics profession. Dudley was at that moment, however, undaunted. His eye was cast toward the unemployment rate and that was nothing but encouraging no matter the “transitory” factors increasingly lining up against it. I see more pressure...

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JPY Joins EDM; End of Week Chart Dump

Brexit, Trump’s election, even the Bank of Japan rumored to be thinking helicopter. Last year was the year of thinking differently and therein was hope. No matter how many times some markets and especially media blindly accepted the “stimulus” or “recovery” judgments of economists over the years, by 2016 and the near-recession globally that accompanied a “rising dollar” that nobody seemed able to understand and explain it had become clear there were no solutions to be found in them. To even...

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Non-cycle Auto Paralysis

In December 2015, automakers were still riding high. Auto sales that year were to be another record, both in terms of units as well as dollars. Americans had spent about $437 billion on new vehicles in those twelve months, up from $407 billion the year before. Though there were notable disturbances throughout especially the second half of 2015, that December more economists and therefore carmaker projections were focused on the Federal Reserve. John Humphrey, Senior VP of the Global...

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Haunting Yellen

I wouldn’t put it in the category of LBJ “losing Cronkite”, but it is at least a measure of amplified pressure (or just any pressure). This week has been utterly embarrassing for the Federal Reserve, a central bank that refuses to define clearly what it is attempting to do. It leaves questions even for who used to be highly sympathetic. Their aim is simple enough as a matter of pure economics. The economy didn’t recover and is never going to (so long as monetary matters remain truly...

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Less Than Nothing

As I so often write, we still talk about 2008 because we aren’t yet done with 2008. It doesn’t seem possible to be stuck in a time warp of such immense proportions, but such are the mistakes of the last decade carrying with them just these kinds of enormous costs. It has been this way from the beginning, even before the beginning as if that was possible. The Great Financial Crisis has no official start date, but we know that it was February 2007 when it became mainstream news. Before then,...

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Who Carries The Burden of Proof?

The idea that interest rates have nowhere to go but up is very much like saying the bond market has it all wrong. That is one reason why the rhetoric has been ratcheted that much higher of late, particularly since the Fed “raised rates” for a third time in March. Such “hawkishness” by convention should not go so unnoticed, and yet yields and curves are once more paying little attention to Janet Yellen. When Mohamed El-Erian wrote in what was I guess an oped in the Financial Times on Monday...

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Same Country, Different Worlds

To my mind, “reflation” has always proceeded under false pretenses. This goes for more than just the latest version, as we witnessed the same incongruity in each of the prior three. The trend is grounded in mere hope more than rational analysis, largely because I think human nature demands it. We are conditioned to believe especially in the 21st century that the worst kinds of things are either unrealistic or apply to some far off location nowhere near our experience. In economic terms, what...

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