Category Archive

MARCH 25, 2019 – FED SUSPENDS RATE INCREASES FOR 2019 At their March monthly meeting, the Federal Reserve indicated they are unlikely to raise interest rates this year.  The news was not unexpected; in the last three months since the December rate hike, US economic growth has slowed as has global growth, inflation has not taken hold and, despite historically …

MARCH 18, 2019 – AS OIL PRICES TICK UP, INFLATION STARTS TO MOVE Oil prices have started to rally lately, which is starting to effect inflation expectations.  The inflationary news counters the slowdown in February hiring and the disappointing retail sales numbers at the end of 2018.  Inflation expectations have fallen in the last six months, which has become a …

MARCH 4, 2019 – Q4 2018 GDP BEATS EXPECTATIONS, BUT IT’S NOT TIME TO CELEBRATE YET US GDP for the last quarter of 2018 was finally released after a two-month delay caused by the partial government shutdown.  Economic growth came in better than expected, with GDP rosing 2.6 percent to close out the year.  Economists were expecting a gain of …

FEBRUARY 18, 2019 – INFLATION PRESSURE Core inflation finished out 2018 at 2.2 percent, 40 basis points higher than where it was 12-months earlier.  The expectations are for this acceleration in inflation to continue into 2019 as a result of above-trend economic growth and growing wage pressures. Labor scarcity has finally intensified and it is affecting wages. Should inflation in …

FEBRUARY 11, 2019 – ANALYSTS THINK RATES WILL STILL MOVE UP IN 2019 Bloomberg experts believe additional rate hikes are closer than we think.  Despite the Fed’s last statement, which put expectations for increases on hold, rising inflation expectations and growth trends pushing unemployment lower, wages higher and solid business fundamentals will drive rates up. Fundamentally the economy is sound, …

FEBRUARY 4, 2019 – POWELL CALLS FOR PATIENCE The Fed held the benchmark interest rate steady at its meeting last week.  No rate increase was expected, however, newsworthy was that the FOMC has become far more cautious regarding the pace of future rate increases. Fed Chair Powell said the “case for raising rates has weakened somewhat”; the direction of the …

JANUARY 28, 2019 – THE GOVERNMENT SHUTDOWN IS TEMPORARILY OVER President Trump succumbed to pressure on Friday and reopened the government for the next three weeks.  The longest shutdown in US history has ended, but there is a February 15 deadline to reach a deal with Congress, else the government will close again. Government offices are expected to open today, …

JANUARY 21, 2019 – GOVERNMENT SHUTDOWN HALTS DECEMBER DATA RELEASES Ordinarily we would be looking to last week’s data releases to assess the state of the US economy, and how this sets expectations for future interest rates and currency valuations.  But due to the partial shutdown, no timely reports are being prepared.  The delay in the economic releases is creating …

JANUARY 14, 2019 – POWELL TRIES TO DISPEL RECESSION FEARS Last Thursday, Fed Chair Jerome Powell addressed the Economic Club of Washington DC.  He doesn’t think the US economy is on the verge of a recession. Rather, he thinks “The US economy is solid. It has good momentum coming into this year.” Powell said the Fed is watching the situation …

JANUARY 7, 2019 – NEW JOBS SOAR; FEARS OF RECESSION ABATE The Labor Department released data that the US economy created an astounding number of jobs in December: 312,000, double the 155,000 created in November, and well over expectations for 180,000.  The numbers are the best posted since February. 2.64 million new jobs were added over the course of 2018.  …