If you have nothing left, it can sound like a winning argument but you have to really try hard enough. In October 2015, with another false dawn dawning on the public, former Federal Reserve Chairman Ben Bernanke wrote and op-ed published in the Wall Street Journal. As had become his habit, it was full of praise – for his own [...]
After what is all but certain to be the final “rate hike” in this cycle, Bloomberg reported that President Trump had previously explored all possible legal ramifications of demoting Federal Reserve Chairman Jay Powell. The issue has become a major one, in the media, anyway, now that Mr. Powell has indicated his error. There will be no further hikes this [...]
In order for rate cuts to be insurance for a boom to continue, there first has to be a boom able to be continued. The FOMC meeting yesterday didn’t directly kill the idea, but that’s actually what’s coming up in the latest projections. This is why there’s been so much attention focused on inflation. The very idea of a strong [...]
In early January, much of the world was dazed and confused. What the hell just happened? Two weeks before, in the middle of December 2018, Jay Powell stood in front of the microphones confidently declaring his rate hikes justified by an extremely strong economy. Yet, even the stock market had turned against him. When the calendar changed to 2019, not [...]
UPDATED for imminent rate cuts and latest FOMC statement (June 19) Rate cuts will be insurance against whatever “trade wars” will throw at the global economy. That’s the current line from monetary officials in the US, anyway. The real question to ask is, how would they know? Starting with trade wars. Is that really what’s behind all this? The evolution [...]
Jay Powell has had his mind changed for him. Why? Not even a year ago he was downplaying things like federal funds. The rise in that one anachronistic rate was inconsistent with a healthy financial system poised for the good times that come with serious economic acceleration. Quite the opposite, actually. To dismiss the obvious contrary signal, in very place [...]
I’ve been writing since October when China reopened from that month’s Golden Week holiday that big dollar problems were imminent. You needn’t have taken my word for it, the PBOC said as much. Not directly, of course, but in interpreting the central bank’s anticipated behavior left little doubt. Over the next few months, more and more it seemed as if [...]
It wasn’t the basis for rational analysis, it was a very public admission of bias and error. We don’t know why inflation ultimately will do what we believe it will, they said, we just believe that it will so you should, too. It sounds ludicrous, but it is actually very much in keeping with standard Economics. The puppet show. What [...]
Something just doesn’t smell right. As I’ve pointed out over the past few weeks, bill yields have been falling. The front, the 4-week instrument, has seen its equivalent rate plummet. This is consistent with deep liquidity problems as well as looming rate cuts (the two do go hand-in-hand). Over the past two session, including today, however, bill yields have spiked. [...]
One of the very few central pillars supporting the hopes for a second half rebound was China’s “stimulus.” Since we’ve been conditioned to just accept whatever a central bank does as equal to it, throughout the last thirteen months since the first RRR cut was initiated that one as well as the four which followed (five for smaller and medium [...]
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