Cue up the old VHS tapes of Bill Clinton. The former President was renowned for displaying, anyway, great empathy. He famously said in October 1992, weeks before the election that would bring him to the White House, “I feel your pain.”What pain? As Clinton’s chief political advisor later clarified, “it’s the economy stupid.”Jay Powell is no retail politician in near [...]
This is the difference, though in the end it only amounts to a matter of timing. When pressed (very modestly) on the slow pace of the ECB’s “inflation” “fighting” (theater) campaign, its President, Christine Lagarde, once again demonstrated her willingness to be patient if not cautious. Why?For one thing, she noted how Europe produces a lot of stuff that, at [...]
What can we make of the fact the US Treasury yield curve inverted between the 7-year and 10-year maturities first? It only took a few more days for more of the curve to bend upside-down, yet that just means the whole middle part is where the bad vibes are congregated. Does this somehow disqualify what would otherwise be a clear [...]
There was some notable grumbling in the months leading up to it, but with the yield curve inverting in August 2019 at the 2s10s junctures, the only part the public has been led to believe is worth noticing, it unleashed a tidal wave of denials. They were weird and obviously desperate, too, because Jay Powell’s Fed had already conducted its [...]
When even Bloomberg can’t help but notice, not just notice but then write about it, that’s significant. Normally a staunch water carrier for the official Federal Reserve position, these curves getting bent so far out of what would be better shapes aren’t so easy to just dismiss and ignore any longer. Jay Powell says household and business finances are holding [...]
The Federal Reserve did something today, or actually announced today that it will do something as of tomorrow. And since we’re all conditioned to believe this is the biggest thing ever, I’ll have to add my own $0.02 (in eurodollars, of course, can’t be bank reserves) frustratingly contributing to the very ritual I’m committed to seeing end.We shouldn’t care much [...]
As Alan Greenspan’s rate hikes closed in, longer-term Treasury yields were forced upward as the flattening yield curve left no more room for their blatant defiance. By mid-2005, though, the market wasn’t ready to fully price the downside risks which had already led to that worrisome curve shape (very flat). While all sorts of bad potential could be reasonably surmised, [...]
What do American consumers know that Jay Powell and the FOMC apparently don’t? Certainly, those voting policymakers at the Federal Reserve are going to start raising their policy rates for political reasons under pressure from politicians facing deeper and deeper economic scrutiny for every dollar higher in crude oil. The Fed, however, can’t extract any additional supplies of black gold [...]
Benchmark revisions have visited the BLS JOLTS survey, too. And yes, they’ve been smoothed. To that end, the hawkishly-watched Job Openings (JO) trend has been altered. Before this week’s release, JO had peaked like the Establishment Survey back last summer and had seemed to soften since. Now, JO continues on an upward bend rather than downward.For JOLTS Hires (HI), the [...]
The 1947-48 experience was truly painful, maybe even terrifying. The US and Europe had just come out of a decade when the worst deflationary consequences were so widespread that the period immediately following quickly erupted into the worst conflagration in human history. Then, suddenly, consumer prices skyrocketed and it left many Americans wondering if there would ever be an end [...]
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