AUGUST 26, 2019 – POWELL SPEAKS AT ANNUAL JACKSON HOLE SUMMIT Trade policy uncertainty is creating challenges to monetary policy. Fed Chair Jerome Powell spoke Friday in Jackson Hole and said the Fed is ready to simulate the economy as needed, but trade uncertainties are compounding the risks to the global economic outlook.  He said, “while monetary policy is a …

AUGUST 19, 2019 – MIXED SIGNALS Bond market sent out a scare last week as 10-year treasuries fell below 2-year yields for the first time since 2007 – is this a precursor to a recession? Industrial output has fallen off in July due to trade issues.  Disappointing data from Germany and China has sparked global growth fears.  On Friday, it …

AUGUST 12, 2019 – US-CHINA TRADE WAR IS THE ECONOMY’S BIGGEST THREAT As trade talks between the US and China remain at an impasse, the world economy is inching toward recession.  Investors are nervous and are demanding politicians and central bankers take action to avert disaster.  Lawrence Summers, former US Treasury secretary and economic advisor, said ‘recession risk is higher …

AUGUST 5, 2019 – FED LOWERS INTEREST RATE BY 25 BASIS POINTS As expected, Fed Chair Powell rolled back interest rates by 25 bps to a range of 2.0-2.25 percent last week.  It was the first reduction in rates since 2008.  Eight of the ten voting members of the FOMC agreed with Powell, with two members wanting to keep rates …

JULY 29, 2019 – FOMC ACTION EXPECTED THIS WEEK It looks like, with nearly 100 percent certainty, the Fed will be lowering interest rates by 25 basis points this week as no news, worthy enough to cause a delay, was released. Those clamoring for a rate cut have a list of reasons why the Fed needs to act now to …

JULY 22, 2019 – THE MARKET ANTICIPATES A RATE CUT NEXT WEEK The Federal Reserve is meeting next week to announce whether an interest rate cut is warranted given the current state of the US economy.  A required cut is not obvious, as data is not indicating a recession. The US stock market is strong, job growth remains steady, unemployment …

JULY 15, 2019 – UPCOMING FED MEETING; WILL POWELL FOLLOW THE MARKET’S LEAD? US central bank policymakers will meet on July 30-31 when they may cut the benchmark interest rate by 25 bps.  The markets have been demanding a cut to protect the economy from rising risks such as trade tensions and slowing global growth. Economists at Bloomberg believe Fed …

JUNE 24, 2019 – FOMC VOTES TO KEEP RATES BETWEEN 2.25% -2.5% On Wednesday, the FOMC voted, by a margin of 9-1, to maintain the benchmark interest rate.  They are taking the stance that rates likely do not need to be adjusted again this year, but the case for “accommodation” has strengthened. This leaves the door open for policy loosening, …

JUNE 17, 2019 – CPI BARELY MOVES UP IN MAY; ARE LOWER RATES AHEAD? US consumer prices rose by 0.1 percent last month.  In the 12-months through May, CPI was up 1.8%, marginally lower than April’s 1.9% gain. The Fed looks to the PCE price index as its preferred inflation measure; it is currently running at 1.6%, well below the …

JUNE 10, 2019 – COULD RATES BE CUT IN AS LITTLE AS 10 DAYS? Last week’s Labor Department report was disappointing; it stated the US economy added 75,000 new jobs in May, one of the weakest increases since the recovery began in the middle of 2009. The jobless rate held steady at 3.6 percent.  The US economy is still growing, …