SEPTEMBER 30, 2019 – ECONOMIC DATA BEGINS TO FALTER Government data for August and September released last week indicate the economy is starting to slow. Consumer spending was up only 0.1% in August; worrisome as it accounts for more than two-thirds of US economic activity. Data for July was revised down by 0.1%, from 0.6% to 0.5%. Year over year …
September 23, 2019 — Fed Rolls back Interest Rates 25 bps
SEPTEMBER 23, 2019 – FED ROLLS BACK INTEREST RATES 25 BPS As expected, the US Fed cut its short-term benchmark interest rate by 25 basis points, the second time in as many months. Rates are now in a range of 1.75 percent to 2 percent. The door was left open for additional cuts, but a timeframe was not mentioned. The …
September 16, 2019 — Inflation Starts to Move
SEPTEMBER 16, 2019 – INFLATION STARTS TO MOVE US consumer prices rose in August by 0.3 percent for the third straight month. But it unlikely it will deter the Fed from cutting interest rates this week. The Fed’s accommodation is being dictated by weakening growth prospects, not inflation. Core inflation, excluding energy and food, increased 2.4 percent for the last …
September 9, 2019 — August Job Numbers Fall Short, but Wages Are Up
SEPTEMBER 9, 2019 – AUGUST JOB NUMBERS FALL SHORT, BUT WAGES ARE UP The US economy adds 130,00 new jobs in August, fewer than expected than the expected 150,000. The unemployment rate remained steady at 3.7 percent, while wages rose 0.4 percent for the month. Despite the weak gains, the numbers do not signal a recession. The labor force participation …
September 3, 2019 — Adjusted Q2 Economic Data Bodes Well for the US Economy
SEPTEMBER 3, 2019 – ADJUSTED Q2 ECONOMIC DATA BODES WELL FOR US ECONOMY Second quarter US GDP results were revised slightly down to 2% from the 2.1% initially reported. But the underlying fundamentals continue to indicate the second half of 2019 should hold steady. Consumer spending, the driver of US economic growth, has come in stronger than first reported. Its …
August 26, 2019 — Powell Speaks at Annual Jackson Hole Summit
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
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
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
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
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 …