Asset markets on Friday reversed course after fully digesting a payroll report that has been universally assailed. The thinking is, apparently, that the Fed will have no choice but to stay on the sidelines now. That view is certainly bolstered by the FOMC’s inaction already in September, so worsening economic fortunes in the US apparently removes any flexibility anytime soon. [...]
An interesting side benefit of the Fed having pegged interest rates effectively to zero and having accomplished so little with QE, is that we get to see markets' self-correcting tendency. Consider what has happened over the last year or so since the Fed made it clear their goal was to start normalizing policy, i.e. raise interest rates. As I've pointed [...]
Economic Reports Scorecard – 9/14/15 to 9/25/15 If you want a good explanation for why the Fed didn't hike interest rates last week, just take a look at all the red in that chart. They might have cited international concerns but the reality is that the US economic data isn't all that robust either. Okay, things aren't as bad as [...]
Well, thank goodness that's over. The Fed met last week and decided to maintain the Fed funds rate in the 0 - 0.25% range in which it has been confined since the great financial crisis of 2008. Of course, the fed funds market is essentially kaput having been usurped by the Fed itself during the crisis so the rate charged [...]
Top News Headlines Pope visits Cuba, Raul Castro praises pontiff's focus on climate change, inequality. Migrant influx to Europe continues. Republicans debate. Fiorina gains traction, Trump still center of attention. Stocks fall on growth worries, gold rallies. AB Inbev offers to buy SAB Miller. Economic News Fed chickens out, keeps rates unchanged. Hewlett Packard to cut another 30,000 jobs. Manufacturing [...]
Top News Headlines BIS Quarterly Report: China slowdown, strong and rising dollar threaten emerging markets. European migrant crisis continues; Germany tightens border security. Stocks rally 2% ahead of Fed meeting. Apple unveils new products Economic News Brazil's debt rating cut to junk. IMF adds its name to very long list of Keynesians begging Yellen to hold off on rate hikes. [...]
Economic Reports Scorecard – 8/31/15 to 9/11/15 The majority of the reports from the last two weeks were worse than expected but the overall view of the economy hasn't changed much. Manufacturing, with the exception of autos, continues to struggle and the majority of the pain is centered in the oil patch as evidenced by the awful Dallas Fed report. [...]
That's the question everyone is asking these days. Will the Fed go ahead and raise interest rates at their next meeting? Or is the economy still so soft they don't dare derail what recovery we've managed to attain? Was last week's employment report good enough to keep the Fed on track to do what they seem to think they need [...]
It looks like the reversal of Monday’s dramatic and frightful liquidation has held and gained in the past two days. From that we can infer, of only the near-term, that those forced repositions were enough to square the liquidity imbalance from the latest “dollar” run. The two words are related not just in a common semantic root, as liquidations are [...]
To illustrate just how badly Monday’s selloff (and yesterday’s late day reversal) seems to have shaken core confidence in the overriding narrative (ALL IS WELL!) you need only view the drastic reversal on what stock prices supposedly mean. With QE’s producing little or no tangible economic benefit, certainly nothing specific with which its proponents can easily point to, they have [...]
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