Macro-Economics

On December 1 a Governor for the Bank of Japan indicated that the BOJ would likely increase their policy rate at the next meeting on December 19. Inflation has been consistently above the BOJ’s 2% target, with the Headline CPI at 3.0% in November and the Core CPI at 3.1%. On November 20 Japan’s...

On Sunday 8 Democrats voted with 52 Republicans to move forward and presumably end the longest government shutdown in history. The vote on November 9 came after 14 previous attempts failed. Five additional Democrats agreed to join the three Dems who had voted yes in the prior 14 votes. The...

As expected, the FOMC voted to end its Quantitative Tightening program on December 1, so it will no longer allow $5 billion of Treasury debt a month roll off. The FOMC did vote to continue allowing $35 billion a month of Mortgage-Backed-Securities (MBS) to roll off. The $35 billion will be...

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...

The FOMC will lower the Funds rate by 0.25% when the FOMC meets on Wednesday October 29, which won’t be a surprise to anyone. Financial markets will react positively if the FOMC announces they will be ending their Quantitative Tightening program since this move represents another easing of...

Rare earths are critical minerals used to manufacture magnets, which are key inputs for electric vehicles, the semiconductor industry, and the US military. Rare earths are crucial for various...

The government shutdown and the suspension of long-standing economic reports is occurring at a potential inflection point in the current business cycle. The Federal Reserve needs to know if the labor market is stabilizing or weakening further and whether inflation is rising more than expected,...

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...

In his Jackson Hole speech Chair Powell presented his views on the outlook for tariff inflation, the labor market, and the conflicting signals coming from the data. “The labor market is a case in point. The July employment report released earlier this month showed that payroll job growth slowed...

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 presidents rotate every year...

The FOMC voted to keep the Funds rate unchanged and as I thought possible two FOMC members who thought a rate cut was appropriate dissented. This is the first time there was two dissenting votes since 1993. The rarity of dissent increased the perception that the FOMC will lower the Funds rate...

During the press conference a reporter...

The FOMC will announce its decision on the Funds rate on Wednesday and Chair Powell will host another press conference. This meeting holds the promise of drama given President Trump’s non-stop criticism of Chair Powell. Wall Street will parse every word and intonation that Chair Powell says....

The financial markets breathed a sigh of relief after the June Headline and Core Consumer Price Indexes came in OK, although the cushion was razor thin. In last week’s WTR I reviewed how much the monthly increase for June would have to increase to lift the Headline CPI to levels that would grab...

Sometimes more can be learned by how markets respond to an economic report than the actual data in the report. Most investors have become quite sanguine about inflation after the April and May CPI reports were tame. The Headline CPI increased by 0.22% in April and just 0.08% in May. Broadly...

The Labor Department reported that 147,000 jobs were created in June and the Unemployment Rate dipped from 4.2% to 4.1% as fewer people looked for work. Average Hourly Earnings increased by 0.2% in June and the annual gain in wage growth slowed to 3.7%, while the Average Work Week ticked down...