201804.18
0
6

Why The Last One Still Matters (IP Revisions)

Beginning with its very first issue in May 1915, the Federal Reserve’s Bulletin was the place to find a growing body of statistics on US economic performance. Four years later, monthly data was being put together on the physical volumes of trade. From these, in 1922, the precursor to what we know today as Industrial…

201708.17
1
2

The Fed Tries To Tighten By Rates, But The System Instead Tightens By Repo

The Fed voted for the first federal funds increase in almost a decade on December 15, 2015. It was the official end of ZIRP, and though taking so many additional years to happen, to many it marked the start of recovery. The yield on the 2-year Treasury Note was 98 bps that day. A lot…

201706.26
1
1

Follow-Up on Bills; Supply Side

Returning to the theme of the parallel evolutionary developments in the early 20th century as compared to the last decades of it, in 1908 famed Gilded Age industrialist Andrew Carnegie wrote what seems today a misplaced article for New York Outlook magazine. The steel magnate lamented the state of American banking, which he called within…

201706.26
8
3

Chart of Last Week: In Need of Official Address

According to the US Treasury, the calculated equivalent treasury bill yield for the 4-week maturity was 76 bps at Friday’s close. At such a short time frame there isn’t actually a single instrument that creates the rate, more of an amalgamation (spline) of various 4-week securities staggered on their own. The bill maturing this week,…

201705.24
Off
3

Act Accordingly, Again

For once, it does seem like the FOMC was asking of its members the right question. They spent years incredulous over the lack of effect due to whatever of the multiple QE’s without changing expectations. No matter how little evidence for their initial let alone ongoing success, they would always, always keep up the “recovery…

201704.18
4
5

Act Accordingly

The textbook says that whenever the central bank raises its policy rate that means tightening. Actual experience over more than just this last lost decade demonstrates that at the very least it is much more complicated than that. There is far more evidence of monetary policy being nothing more than a response, as that reverse…

201703.10
3
2

Mugged By Reality; Many Still Yet To Be

In August 2014, Federal Reserve Vice Chairman Stanley Fischer admitted to an audience in Sweden the possibility in some unusually candid terms that maybe they (economists, not Sweden) didn’t know what they were doing. His speech was lost in the times, those being the middle of that year where the Fed having already started to…

201511.29
Off
0

Bond Complacency

This chart from our strategic macro research partner shows the incredible length of stimulus. Has the current, prolonged period of unchanged FED policy rate of 0% conditioned investors to think this level of interest rates is the new normal? The FOMC looks to be ready to embark on a period of raising interest rates. If 10…

201509.07
2
0

Raise the Rate and Stop Punishing Savers

For the past 7 years we’ve listened to the so-called “experts” bemoan the “extraordinary” Fed policies. They called them dangerous, untested, experimental. Now all of a sudden there is a change of heart? Don’t raise the rate?? It is too risky?? It would be irresponsible and dangerous?? The markets and the economy couldn’t possibly bear an interest rate above…