When the minutes of the March 2018 FOMC meeting were released on April 11, St. Louis Fed President James Bullard, a non-voting alternate member, immediately objected to one statement contained with them. According to Bullard’s version, the notation that “all participants” agreed further rate hikes were necessary was incorrect. He was and remains opposed to that contention and we are [...]
It’s the kind of thing you’re supposed to overlook and not think too deeply about. Recall the basis of inflation hysteria: the economy was poised to take off and do so convincingly; that plus the ubiquitous LABOR SHORTAGE!!! meant that wages then inflation were going to break out higher; accelerating consumer prices were then to force the FOMC into a [...]
There are a lot of reasons why interest rates may have risen recently. The federal government is expected to post a larger deficit this year - and in future years - due to the tax cuts. Further exacerbating those concerns is the ongoing shrinkage of the Fed's balance sheet. Increased supply and potentially decreased demand is not a recipe for [...]
I believe if you were to ask most people their definition of the worst economic case, they would respond with some description of a crash. An exceedingly large contraction that spares practically no one, destroying much in its path. Like what followed 1929, that would seem to qualify. It’s why we spend so much time going back to 2008. That [...]
Since nobody can seem to agree on what is an asset bubble, it’s that much more difficult to try and estimate its end. A bubble stops being a bubble only when the people participating decide to question the rationalizations they’ve invented to keep them complacently inside of it. It’s most often just that vague sense the world isn’t turning out [...]
The sweeping tide of populist election victories has not been limited to just the US and Europe. There have been torrents in Asia, too. Though there is some disagreement whether he counts among them or not, India’s Narendra Modi swept to a historic electoral triumph in May 2014 sure sounding a lot like one, maybe even one of the first. [...]
The risk budget changes this month as I add back the 5% cash raised in late October. For the moderate risk investor, the allocation to bonds is still 50% while the risk side now rises to 50% as well. I raised the cash back in late October due to the extreme overbought nature of the stock market and frankly it [...]
Last year’s infatuation with globally synchronized growth was at least understandable. From a certain, narrow point of view, Europe’s economy had accelerated. So, too, it seemed later in the year for the US economy. The Bank of Japan was actually talking about ending QQE with inflation in sight, and the PBOC was purportedly tightening as China’s economy appeared to many [...]
The yearlong wireless data plan nightmare is officially over. For the second month in a row, the CPI for Wireless Telephone Services, which includes any unlimited data at fixed prices, was more stable in its annual comparison. In April 2018, the index was nearly flat to April 2017; down by less than 1%. It was, for once, transitory. What that [...]
Chinese exports rose 12.9% year-over-year in April 2018. Imports were up 20.9%. As always, both numbers sound impressive but they are far short of rates consistent with a growing global economy. China’s participation in global growth, synchronized or not, is a must. The lack of acceleration on the export side tells us a lot about what to expect on the [...]
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