The Federal Reserve released the minutes from the January 28 FOMC meeting on February 18 and they were revealing. The minutes reaffirmed my view that there are 3 groups within the FOMC and the lines between them are entrenched, unless incoming data...
The labor market appears to have stabilized, GDP growth is comfortably above the economy’s long term non-inflationary growth potential of 1.9%, and inflation is above the 2% target. This mix of economic variables has created three groups within the FOMC. Those...
The stock market suffers significant declines when a good reason to sell develops, and being overvalued isn’t a good reason. High valuation does however leave the market vulnerable to a large decline when good reasons appear. History tells us it’s not a question of if, but...
I grew up in the Midwest and in January and February lakes and ponds would freeze over and allow ice skating since the ice was thick. As spring approached (never fast enough as I got older), the ice was thinner and skaters had to be careful. The worst sound a...
Bifurcation is inherently unstable since it creates a tension between sections of a whole and by definition shows that everyone isn’t pulling in the same direction. It’s difficult to solve challenging and complex problems even when everyone is seeking a common solution,...
At one time the phrase “ A watched pot never boils” meant time seems to pass more slowly when one is waiting for something to happen. The time waiting also allows expectations to grow and I remember when the event I had been waiting for finally...
After each FOMC member expresses their assessment of the economy, inflation, the labor market, and the appropriate level for the Funds rate during a FOMC meeting, Federal Reserve Chairs have attempted to build a consensus. During Ben Bernanke’s term as Chair (February 1, 2006...
Federal Reserve Governors vote at every FOMC meeting as does the President of the New York Federal Reserve. Being a Governor carries more weight in affecting policy changes than being one of the other 11 Federal Reserve district presidents. Four of the 11 district...
Housing contributes roughly 16% to GDP with 3% to 5% coming from spending on new single family homes, apartment buildings, and remodeling. Another 12% to 13% is spent on housing services which includes rent, utilities, insurance, an internet connection through cable, and...
