It used to be that if the US sneezed, the whole world would catch cold. Placed in terms of how the global economy worked, the point was easily made that US demand pretty much directed how it would fare for everyone else. Without US economic growth, the world would surely stumble as it had throughout modern history. Apparently, this is [...]
There are more than 300 PhD Economists working on staff for the Federal Reserve. The central bank tells us that they “represent an exceptionally diverse range of interests and specific areas of expertise.” Perhaps, but they are all PhD Economists, aren’t they? These highly educated people cover a broad range of topics, for sure, and all from the same starting [...]
June 13 sticks out for both eurodollar futures as well as IOER. On the surface, there should be no bearing on the former from the latter. They are technically unrelated; IOER being a current rate applied as an intended money alternative. Eurodollar futures are, as the term implies, about where all those money rates might fall in the future. Still, [...]
There had been whispers that the FOMC would have to undertake a second “technical adjustment” this year. Is it coincidence that the eurodollar futures curve inverted on the same day, June 13, Jay Powell announced the first one? Perhaps, but given what we are talking about here there is a fair chance they are related, especially in the close aftermath [...]
The US is going it alone. The rest of the world isn’t so synchronized like it was, purportedly, in 2017. No matter, at least for Americans. Even Europe, last year’s poster boy for what this upswing was going to accomplish, has thoroughly disappointed. The United States is just going to have to leave everyone else behind with no regrets. The [...]
Cushing, OK, delivered what it could for the CPI. The contribution to the inflation rate from oil prices was again substantial in August 2018. The energy component of the index gained 10.3% year-over-year, compared to 11.9% in July. It was the fourth straight month of double digit gains. Yet, the CPI headline retreated a little further than expected. After reaching [...]
The FOMC statement for the July-August 2018 policy meeting exceeded expectations once more. It’s difficult for the Committee to continually do this since the whole point of these things is to downplay all expectations. The goal is to make everything seem boring and uninteresting, if the Federal Reserve is doing its job. But they are always interesting because nothing over [...]
Why did inflation hysteria die? The answer is surprisingly simple. Proponents way oversold the thing. They kept claiming that the labor market, via a truly booming economy, would force the Fed’s hand. Wage growth was about to explode, therefore monetary policy couldn’t afford to be complacent. Aggressiveness was about to become Jay Powell’s go-to position. This year is now more [...]
With the switch to the 2012 reference, the new fixed dollar comparison makes revisions in the PCE Deflator a bit springier. Lows are a little lower; highs a little higher. At the bottom in 2009 (July), for example, the 2009 reference says consumer price inflation was -1.18%. This new 2012 reference says it was -1.24%. For June 2009, the difference [...]
One of the most disgusting and least self-aware passages in any of the tens of thousands of published pages of FOMC discussions was in reference to the People’s Bank of China. On September 16, 2008, the US central bank’s operating and policy committee was sharing a laugh at the expense of their Chinese counterparts. Some solemnity and internal reflection should [...]
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