Economic Reports Scorecard Well it's time to get back in the habit of doing this every two weeks. The schedule was interrupted over the holidays and then again by my annual outlook piece. The economic data released over the last two weeks was not particularly inspiring, not that hard data is what has been egging on the old animal spirits. [...]
Market based expectations for growth and inflation have moderated slightly since the last update. Since mid-December, interest rates - nominal and real - have fallen back, the yield curve has flattened, the dollar index has pulled back from its highs and gold has moved off its lows. In short, the Trump trade is being partially reversed as it dawns on investors [...]
Economic Reports Scorecard The incoming economic data has improved since the last update with a plethora of reports coming in better than expected. This is the longest run of better than expected data we've had in some time and encompasses a wide variety of indicators. Most surprising I think is that we are seeing a bit of an upturn in [...]
Talking with my colleague Joe Calhoun yesterday, he was eager to share with me something he found in the (virtual) pages of the Wall Street Journal, a perfect sign of the times. In a story about a group of nuns in Germany taking their financial future into their own hands, Joe couldn’t help but shake his head at what surely [...]
Back in June I mused about a Trump election: Forget for a minute that Donald Trump is the Republican nominee. Think about the policies he is likely to propose as President and how they might affect the markets. Forget the campaign rhetoric for a minute, the things he’s proposed that can’t get done because the US President isn’t a dictator [...]
As with last month, I delayed this update a few days to see if we might gain some clarity that would warrant some change in our allocation. Alas, no such clarity has emerged and so, as it has been since August, the risk budget remains unchanged this month. Indeed, as last month, the entire portfolio is unchanged. For the moderate [...]
Economic Reports Scorecard The economic data of the last fortnight was typical for this cycle with some reports showing improvement and others the opposite; "mixed" has been the most often used adjective of this expansion. Of course, some reports are more important than others and the bad news was concentrated in an area that has consistently supported the economic bull [...]
Economic Reports Scorecard The US economy continues to trend, as the Fed finally noticed in its most recent dot plot, at a low rate of growth. The Fed downgraded their long term growth outlook to 1.8% and that's just a rounding error from the 2% we've been tracking for quite a while now. The fluctuations around that number have basically [...]
Last April, former Fed Chairman Ben Bernanke wrote a series of blog posts for Brookings that was intended to explain one of the biggest contradictions of his legacy. If quantitative easing had actually worked as he to this day suggests that it did, why wasn’t the bond market in clear agreement? In order to try to reconcile the huge discrepancy, [...]
Though I highly doubt he will admit it, he’s just not the type, even Ben Bernanke knows on some level that bond market is decidedly against him, or at least his legacy. Economists have a funny way of looking at bonds, decomposing interest rates into Fisherian strata. To monetary policy, interest rates break down into three parts: expected inflation over [...]
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