MAY 14, 2018 – INFLATION REMAINS LOW, BUT THE FED IS HOLDING THE COURSE Core inflation for April was reported at 2.1 percent year-over-year last week, up 0.2 percent, slightly short of expectations for a 0.3 percent rise.  This time last year, core inflation was around 1.7 percent; the worry that prices are falling rather than rising, is unfounded.  In …

MAY 7, 2018 – UNEMPLOYMENT RATE KEEPS FALLING BUT WAGES FAIL TO RALLY Non-farm payrolls rose 164,000 in April, missing the consensus estimate of 193,000. But, despite the lower results, the unemployment rate fell to 3.9 percent after holding for six months at 4 percent.  The unemployment number is the best in 18 years.  However, wages remain stubbornly low, with …

APRIL 30, 2018 – Q1 GDP SLOWS, BUT BEATS EXPECTATIONS The US economy slowed in the first quarter due to the weakest consumer spending in nearly five years.  The news is not that bad, as the setback is seen as temporary with the labor market tightening, strong levels of consumer confidence and fiscal stimuli coming into play. GDP increased at …

APRIL 23, 2018 – A FLATTENING YIELD CURVE Strategists are getting concerned about the flattening of the yield curve and the rate hike path laid out by the Fed.  The Treasury yield curve is the tightest it has been since 2007.  An inverted yield curve is a signal of a recession.  So does this mean the Fed is going to …

APRIL 16, 2018 – FED PRESIDENTS’ REMARKS INDICATE FURTHER RATE HIKES As we await the release of the first quarter GDP data at the end of April and what it bodes for the pace of interest rate changes, two Fed presidents made statements last week. James Bullard, president of the St. Louis Fed, said the FOMC statement should be changed …

APRIL 9, 2018 – JOB CREATION SLOWS; POWELL SPEAKS AS NEW FED CHAIR The nonfarm payrolls for March were announced last week with an increase of 103,000, which was below expectations.   The unemployment rate held steady at 4.1 percent. The jobs numbers were disappointing, though not unexpected.  Part of the drawback is attributable to weather-related issues according to the Bureau …

APRIL 2, 2018 – CONSUMER CONFIDENCE HOLDING WITH EMPLOYMENT NUMBERS Headline consumer confidence slipped slightly in March after reaching an 18-year high in February.  However, consumer confidence is still seen as being high and indicates support for strong growth in consumer spending in the coming months. Lower income taxes and accelerations in hiring are raising consumer optimism. The jobs-plentiful index …

MARCH 26, 2018 – FED UPS RATES BY 25 BASIS POINTS, HINTS AT 4TH INCREASE THIS YEAR As expected, new Fed Chair Jerome Powell announced a 25 basis point rate increase last week.   The vote to increase the federal funds rate was unanimous;  the range of rates now stands at 1.50 to 1.75 percent.  The language used in the FOMC …

MARCH 19, 2018 – GOOD NEWS ABOUNDS; RATES ON THE RISE THIS WEEK The FOMC meets this week, expectations are rates will move up by 25 basis points.  Nothing has happened in the last weeks that would derail these plans.  In fact, the economy seems to be picking up on all fronts. Last week, filings for unemployment benefits fell for …