Until last week you hadn't heard much about the bond market rally. I told you we were probably near a rally way back in early April when the 10-year was yielding around 1.7%. And I told you in mid-April that the 10-year yield could fall all the way back to the 1.2 to 1.3% range. The bond rally since April [...]
I thought of Gilda Radner this past week. Actually, I thought of a character she created on the original Saturday Night Live, Emily Litella, who was a regular on the Weekend Update segment. She'd start to rant about something topical, getting it completely wrong at which point Jane Curtin or Chevy Chase would explain it to her and she'd respond. [...]
I told you last week that there were strange things going on in the labor market but I had no idea how much of an understatement that really was. Much of last week's economic focus was on the inflation report but I think the JOLTS report may turn out to be more significant. Inflation was indeed pretty hot year over [...]
The US economy is still stuck in the stall it's been in since early spring. Sometime in mid-March everything just seems to have gone into suspended animation. Interest rates and the copper/gold ratio stopped rising. Real interest rates (TIPS) stopped rising. The US dollar started falling. But nothing has fallen so far as to warrant concern about a double-dip recession. [...]
It was hard not to hear about cryptocurrencies last week what with the bear market and all. Actually, you can make the case that bitcoin has had two bear markets since mid-April. There was a 27% decline followed by a 27% rally, followed by last week's rout. From its intraday peak in April to its intraday low last week, bitcoin [...]
It was all over the news last week. Inflation has arrived. The CPI was hotter than expected. The PPI was even hotter. Import prices were up and export prices were up more. It was impossible to miss the inflation story last week. Stocks got the message and sold off on the hot CPI and finished the week lower for a [...]
Reopening 2 is definitely happening. The labor market, in particular, is sending off the same kind of signals if not to the same huge extent as it had during Reopening 1 in May and June of last year. The March 2021 payroll report was better than 900,000, and the one for April (last month) to be released tomorrow is expected [...]
Deconstructing long-term interests may seem like a purely academic exercise. This is certainly how Economists treat it, coming at them using their statistical models. The goal is always to properly interpret these most basic of economic, financial, and monetary fundamentals so as to understand where everything that matters stands. Getting this wrong is the difference between night and day; between [...]
Since we’re still on the topic of Treasury auctions, here’s another one to take a closer look at. Yesterday, Treasury sold $18 billion in 5-year TIPS – the inflation protected security (91282CCA7) – and though there were plenty of bids they came in at prices somewhat out of whack with the secondary market. This left two-thirds of the offering to [...]
With government cash being shoveled into personal and corporate bank accounts, US consumers have reported that they are being more optimistic about the state of the economy. Before that, they went on a spending binge as stated unequivocally by historic retail sales figures. Why, then, so much higher spending than improved happiness and certainty while going about it?The University of [...]
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