Is the Fed's monetary tightening about over? Maybe, maybe not but there does seem to be some disagreement between Jerome Powell and his Vice Chair, Richard Clarida. Powell said just a little over a month ago that the Fed Funds rate was still "a long way from neutral" and that the Fed may ultimately need to go past neutral. Clarida [...]
The populist pathology is incredibly simple; no one ever takes the blame. Things continually go off-track and officials merely shrug their shoulders and point their fingers. The very idea of accountability is anachronistic. Now that dark clouds are gathering, in the IMF’s words, the fingers are out again. President Donald Trump said Tuesday that he does not like the Federal [...]
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 PCE Deflator rose 2.31% year-over-year in July 2018, according to the Bureau of Economic Analysis. That makes five in a row for Jay Powell to try to make his case. Prior to March, the central bank had missed its target for the PCE Deflator in 68 out of 70 months using the 2012 dollar reference. Has something changed? Yes [...]
On June 13, the day the eurodollar futures curve inverted, Federal Reserve Chairman Jerome Powell was at his regularly scheduled press conference following the regularly scheduled FOMC meeting. Nobody asked him about eurodollar futures, of course, because why bring that up? The press did inquire about IOER, though. The Fed had decided to make a “technical adjustment” in its policy [...]
Deutsche Bank wasn’t the only global institution under the gun of the US Justice Department. While the German bank settled for a record fine earlier this year, RBS was also hit. Theirs was an eye popping $4.9 billion settlement. The ostensibly British bank had already set aside $3.4 billion for the anticipated civil penalty, meaning that only $1.4 billion (and [...]
The term "decoupling" was invented in early 2008 really because of oil prices. It was widely believed that though the US economy might stumble that year (because of nothing other than subprime mortgages, naturally) the rest of the world would be insulated from any fallout. EM economies like China's were immune from such folly, they said. Like every other economic [...]
Like all sentiment surveys, Germany’s ZEW is susceptible to overzealousness on the part of the survey participants. The Zentrum für Europäische Wirtschaftsforschung is a think tank located in Manheim that has since 1991 carried out this broad questionnaire. Up to 350 analysts are included in the panel, each working at a bank, insurance carrier, or major industrial firm located in [...]
In July 2014, then-Federal Reserve Chairman Janet Yellen testified before Congress. It was the usual Humphrey-Hawkins stuff, except in this instance at that particular time there was every reason to suspect things were finally changing. The unemployment rate, in particular, was sinking like a stone dropped in a pond. Some additional economic indicators signaled perhaps the pathway toward substantial improvement [...]
Back a few months ago when Europe was booming, or at least everyone was sure that this one particular economy was, market futures prices indicated an expectation for the first European rate hike to take place by Q2 2019. That was consistent with the US Federal Reserve’s experience as well as how the mainstream narrative had developed especially over the [...]
Stay In Touch