After considering all the data this week, the GDPNow estimate is 1.2% growth. This is down from the initial estimate of 2.3% on Oct 27th and down from 2.1% at the end of last week. The big dial mover was today's ISM report. Specifically the report had negative repercussions for goods consumption, business equipment investment and goods exports. Rates have [...]
The price illusion. It is causing enormous confusion and difficulty, making the global economy out to be something it really isn’t. In fact, the whole situation is being viewed backward. What’s presumed from this is a red-hot economy causing consumer prices to skyrocket. In such a scenario, central banks might need to rush their rate hikes to cool it down [...]
All eyes on Europe today where ECB Governor Christine Lagarde tried very hard to avoid committing to either rate hikes or the timing of them. Always conditional, she says. However, everyone knows different. With her counterparts at the Federal Reserve already committed to panicking over CPI rates, the latest HICP inflation numbers in Europe are not going to take any [...]
You have to hand it to Willian Dudley. Having committed one egregious error after another while in charge of the Fed’s New York-based Open Market Desk during the first Global Financial Crisis, Bill was kicked upstairs anyway to run that entire central bank branch following the debacle. He then continued on in the same spirit and with the same results. [...]
It’s not hard to reason why there continues to be this conflict of interest (rates). On the one hand, impacting the short end of the yield curve, the unemployment rate has taken a tight grip on the FOMC’s limited imagination. The rate hikes are coming and the markets like all mainstream commentary agree that as it stands there’s nothing on [...]
We’ve been here before, near exactly here. On this side of the Pacific Ocean, in the US particularly the situation was said to be just grand. The economy was responding nicely to QE’s 3 and 4 (yes, there were four of them by that point), Federal Reserve Chairman Ben Bernanke had said in the middle of 2013 it was becoming [...]
The bond market is imploding, right? It has to be going by everything you hear. Did you know that the last two 30-year bond auctions had gone “awry”, as one mainstream news outlet put it? Another "media" shop declared them “catastrophic.”The second of those long bond sales was conducted just yesterday afternoon, right in time to run into the buzzsaw [...]
The economic news recently has been better than expected and in most cases just pretty darn good. That isn't true on a global basis, as Europe continues to experience a pretty sluggish recovery from COVID. And China is busy shooting itself in the foot as Xi pursues the re-Maoing of Chinese society, damn the economic costs. But here in the [...]
Picking up where we left off from our review of the first series of landmines, including the big one at the end of 2008, the world has been rocked by these things in almost continuous succession. Every couple of years, “everyone” says the world is recovering from the previous “unexpected” shock only to find instead how the global system ends [...]
Why always round numbers? Monetary policy targets in the post-Volcker era always change on even terms. Alan Greenspan had his quarter-point fed funds moves. Ben Bernanke faced with crisis would auction $25 billion via TAF. QE’s are done in even numbers, either total purchases or their monthly pace.This is a messy and dynamic environment, in which the economy operates out [...]
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