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Federal Reserve/Monetary Policy

Macro: Markets — Banks exit overnight trade and extend duration

By |2023-11-18T09:03:02-05:00November 16th, 2023|Bonds, Commodities, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

For the first time since March we are seeing a positive correlation between bond yields and reverse repos sold by the Fed. The change started during the last week of October and has continued throughout November. The correlation in March coincided with bank failures, mainly Silicon Valley Bank and Signature Bank. In between March and the end of October, the [...]

Weekly Market Pulse: Dark Matter

By |2023-11-13T09:29:55-05:00November 13th, 2023|Alhambra Portfolios, Alhambra Research, Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Real Estate, Stocks|

It's the residual of all the stuff we can't explain. It's not that our models are wrong, it's the dark matter that's out there. - Fed Governor Neel Kashkari, referring to the "term premium" in long term Treasury yields The curious task of economics is to demonstrate to men how little they really know about what they imagine they can [...]

Macro: FOMC November meeting — target remains unchanged

By |2023-11-01T15:41:00-04:00November 1st, 2023|Economy, Federal Reserve/Monetary Policy|

The Fed left the policy rate unchanged at a range of 5.25-5.5%. Thinking about future meetings, Powell said that they he believes policy is restrictive and is working to bring down economic activity and inflation. But, he also said that they do not know whether the current policy rate is sufficiently tight enough to bring down inflation to 2% over [...]

Survey of Salient Risks to Financial Stability

By |2023-10-23T15:09:14-04:00October 23rd, 2023|Economy, Federal Reserve/Monetary Policy, Markets|

Here is a brief summary of what is of concern to domestic and international policymakers, academics, community groups, and others. We might call these "known risks." Persistent inflation and monetary tightening Persistent or reaccelerating inflationary pressures Resilient economic outlook leading to further monetary policy tightening Volatile market conditions Entrenched expectations of higher inflation leading to higher realized inflation leading to [...]

Weekly Market Pulse: An Ego Driven Fed

By |2023-10-22T18:25:55-04:00October 22nd, 2023|Alhambra Portfolios, Alhambra Research, Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Real Estate, Stocks|

Well, I finally got it. I've been fighting COVID for the last week and while most of my symptoms have improved, I am not 100% yet. My goal from the beginning of COVID was to avoid it, if at all possible, until it became endemic and less lethal. It seemed logical to me, a layman, that it would follow this [...]

Weekly Market Pulse: Good News Is Good News

By |2023-10-09T07:12:39-04:00October 8th, 2023|Alhambra Portfolios, Alhambra Research, Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Real Estate, Stocks|

The employment report on Friday seemed like a good one. The unemployment rate was unchanged as the economy added 336,000 jobs in September. The gains were widespread with additions in manufacturing, construction, wholesale trade, retail trade, transportation, warehousing, leisure and hospitality, healthcare and education, and government. Average hourly earnings were up 0.2% for the month and 4.2% year-over-year. It was [...]

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