You're going to hear a lot of talk about the yield curve soon and what it means for "the" yield curve to uninvert (which isn't a real word but will get used a lot). The difference between the 10-year Treasury note yield and the 2-year Treasury note yield is about to turn positive, the 2-year note yield recently falling a [...]
Overall, the economy continues to grow at a solid pace. But the inflation and labor market data show an evolving situation. The upside risks to inflation have diminished. And the downside risks to employment have increased. As we highlighted in our last FOMC statement, we are attentive to the risks to both sides of our dual mandate. The time has [...]
What a difference a day makes! After a two-week correction of nearly 5%, the S&P 500 spent the first part of last week rallying in anticipation of a friendly Fed meeting. That Fed meeting Wednesday produced the expected, namely that a rate cut in September was likely. That pushed the S&P 500 up over 2% from the Fed meeting to [...]
There's been a pretty remarkable turnaround in markets over the last 10 days. At the end of June, market returns were dominated by large cap growth stocks. The Russell 1000 growth index was up 20.5% while the value index was up a mere 6.5%, a spread rarely seen over such a short period of time. The Russell 2000 index of [...]
Growth is slowing Inflation remains sticky Dollar stays firm Interest rates have probably peaked but higher for longer Growth peaked on a quarter over quarter seasonally adjusted annual rate in Q3 last year at 4.9%. The preferred reading is on an annual basis where growth peaked in Q4 of last year at 3.13%. Growth in Q1 was 2.88% and growth [...]
A recent poll conducted by Harris and the UK news outlet The Guardian, produced some interesting results. Of those polled: 56% believe the US economy is in recession 49% believe the S&P 500 is down for the year 49% believe the unemployment rate is at a 50-year high 72% think inflation is increasing The reporting on this has been mostly [...]
There were two important inflation reports last week. One of them, the Producer Price Index, focuses on wholesale prices and it showed inflation hotter than expected in April. The year-over-year change bottomed in June of last year at just 0.3% and has been rising steadily since then. It now stands at 2.2%. The market reaction to this report was - [...]
Special Note: Back in late March, I highlighted a charitable organization - Our Grounds - that I had had a very positive interaction with and asked that you consider donating. I also asked readers to send me recommendations for other charities they supported and today I am pleased to feature Sugar Plum Bakery in Virginia Beach, VA, recommended by Alhambra [...]
The first quarter of 2024 is in the books and the US economy and markets continue to defy expectations, which coming into this year were that growth and inflation would both moderate and the Fed would be able (or forced, depending on how much things slowed) to cut interest rates 0.25% as many as six times this year. In fact, [...]
Over the last two years, the evolution of the US economy has been driven by a return to “normal”. The distortions of the response to COVID had a profound impact on the economy that I believe will persist for many years. The change in cash levels at the household level were large and have proved more persistent than most expected. [...]
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