The Federal Reserve added the word “symmetric” to its inflation goal for a reason. Back in May 2018 when it was made official officials made quite a big deal out of it. It was for two reasons, actually, both of them intertwined in the way Economists believe the economic system is supposed to work; and the central bank’s place in [...]
Jay Powell says that three’s not a crowd, at least not for his rate cuts, but four would be. As usual, central bankers like him always hedge and say that “should conditions warrant” the FOMC will be more than happy to indulge (the NYSE). But what he means in his heart of hearts is that there probably won’t be any [...]
Headline GDP growth during the fourth quarter of 2019 was 2.05849% (continuously compounded annual rate), slightly lower than the (revised) 2.08169% during Q3. For the year, the Bureau of Economic Analysis (BEA) puts total real output at $19.07 trillion, or annual growth of 2.33% and down from 2.93% in 2018. Last year was weaker than 2017, the second lowest out [...]
While China’s coronavirus outbreak dominates Western media attention, the Chinese economy has been off for its Golden Week New Year celebrations. Unfortunate timing, to say the least. While global markets have been digesting the latest developments, domestic markets in China have been closed. Nobody really knows how they will reopen on Monday. As a consequence, the People’s Bank of China [...]
There he was, the Fed Chairman stumbling through a question about headwinds and transitory factors. No, not Jay Powell in January 2020, this was Ben Bernanke in June 2011. The Fed had just downgraded its recovery forecasts (again) and some in the media weren’t getting it. After all, QE2. It was this enormously powerful monetary agent introduced for a second [...]
It’s a palpable impatience. Having learned absolutely nothing from the most recent German example, there’s this pervasive belief that if the economy hasn’t fallen apart by now it must be going the other way. The right way. Those are the only two options for mainstream analysis (which means it isn’t analysis). You can see it in how everything is framed. [...]
According to analysts and economists who watch these things, Germany’s IFO Business Climate Index was expected to continue its rise. Having purportedly bottomed out back in September, like other sentiment indicators this one had been on the rebound, too, if, though, much less than those others (especially the “stimulus” loving ZEW). While maybe not suggesting the turnaround we had been [...]
IHS Markit’s Composite US PMI rose to a 10-month high in January 2020. According to its flash estimate, the index was up to 53.1 from 52.7 in the final reading for December 2019. Driven by a rebound in the services component, the composite combines both the manufacturing and service PMI’s into a single number, Markit’s view is that the US [...]
Between the summer of 2011 and February 2012, the unemployment rate experienced its largest half-year drop since the huge recovery that had been taking place in 1984. It was a very welcome sign that the US economy may have avoided becoming entangled in the global funding messes of 2011. Caught flat-footed, as always, Ben Bernanke’s Fed had ended QE2 at [...]
The repo story especially as it is told from the TIC perspective is our main emphasis currently. However, there are other odds and ends in the series that deserve some separate attention if not to the same level. The dollar system is more than collateralized lending, and this will include a few items that I’m going to point out for [...]
Stay In Touch