April 25, 2025 | Daily JAM, Morning Briefing |
The S&P 500 gained more than 4% for this week. Some of that was the result of talk from the White House about possible tariff negotiations with China.As the week wore on, though, attention shifted from tariff talk to comments from Federal Reserve officials that seemed to suggest that the central bank might consider cutting interest rates as early as its June meeting if economic growth slowed. Yep, the Powell Put is back. In this scenario, bad earnings and bad economic news become good news because they push the Federal Reserve closer to cutting interest rates.
April 17, 2025 | Daily JAM, Morning Briefing, Short Term |
One day after Fed Chair Jerome Powell warned that the administration’s trade war was “highly likely” to spur a temporary rise in inflation with the potential for longer-lasting effects President Donald Trump blasted the Federal Reserve for not lowering interest rates and said its chair’s “termination cannot come fast enough.” “Jerome Powell of the Fed, who is always TOO LATE AND WRONG, yesterday issued a report which was another, and typical, complete ‘mess!’” Trump wrote on Truth Social. Referring to interest rates, he added: “He should certainly lower them now. Powell’s termination cannot come fast enough!”
April 9, 2025 | Daily JAM |
Today’s U.S. Treasury auction of $39 billion in 10-year notes went better than expected despite recent volatility in the bond market. That lessened my worry about a potential tightening of liquidity in the critical Treasury market.
April 2, 2025 | Daily JAM, Videos |
Today’s video is Why the Fed is Almost Certain to be Wrong. Blame it in lags. Lags make economic forecasting really difficult at the best of times. How long does it take policies like tariffs and tax cuts to actually affect the economy and show up in the data? Right now, we’re dealing with lags from a tariffs that will eventually raise consumer prices. We don’t know when this will hit people in the wallet and really start to affect the economy as a whole. Another problem is the upcoming Trump tax cuts. This will be stimulative to the economy and the Fed may have to look at raising rates again in effort to slow more inflation. If, however, the tariffs slow the economy enough to balance out the stimulative effect of the tax cuts, the Fed would look at lowering rates. There’s really little that monetary policy can do about tariff-caused price increases. White House accounting says the tariffs and tax cuts will balance each other, but it’s tough to say if the money coming out of consumer pockets are the same pockets benefiting from the tax cuts. All this to say, the Fed remains between a rock and a hard place, and has little chance of getting this right and will almost certaInly make a mistake. The question is, How big will the mistake be?
March 28, 2025 | Daily JAM, Morning Briefing |
The Federal Reserve’s preferred inflation measure rose in February at a faster pace than in January. The rate of increase was also greater than economists had expected
March 20, 2025 | Daily JAM, Morning Briefing |
That didn’t take long. Wednesday afternoon the Federal Reserve decided to keep its benchmark interest rate steady–no rate cut. Wednesday night President Donald Trump renewed his call for the Federal Reserve to lower interest rates as he criticized the central bank’s decision. “The Fed would be MUCH better off CUTTING RATES as U.S.Tariffs start to transition (ease!) their way into the economy,” Trump wrote on Truth Social. “Do the right thing.” Trump added: “April 2nd is Liberation Day in America!!!” President Trump’s criticism of the Fed’s decision certainly isn’t a surprise.
March 15, 2025 | Daily JAM |
I expect less drama than markets now fear from Wednesday’s meeting of the Federal Reserve’s interest-rate-setting Open Market Committee.
March 7, 2025 | Daily JAM |
Just minutes after a slide that drove the S&P 500 down over 1%, the gauge staged an “oversold bounce” after Federal Reserve Chair Jerome Powell told a New York audience that the economy is fine. “Despite elevated levels of uncertainty, the US economy continues to be in a good place,” Powell said at an event Friday in New York hosted by the University of Chicago Booth School of Business. “We do not need to be in a hurry, and are well positioned to wait for greater clarity.”
March 1, 2025 | Daily JAM |
I see the beginning of two weeks of extraordinary volatility. Look what’s on deck.
February 21, 2025 | Daily JAM, Morning Briefing, Short Term |
U.S. consumers’ expectations for long-term inflation rose to the highest rate in three decades, in February’s consumer sentiment survey from the University of Michigan. Consumers expect prices will climb at an annual rate of 3.5% over the next five to 10 years. The rate is the highest since 1995,
February 12, 2025 | Daily JAM |
Bond traders pushed out bets for the next Federal Reserve interest-rate cut to December on today’s increase in the CPI inflation rate. Swap contracts linked to future Fed decisions had before today anticipated a rate cut by September. Today’s swap pricing implies just one quarter-point cut this year. The yield on benchmark 10-year Treasury closed the day up 9 basis points to 4.62%%. Two-year Treasury yields, more sensitive than longer-maturity debt to Fed rate moves, rose by 7 basis points to 4.35%. “How can anyone justify any rate cuts with such inflationary pressure?,” Roger Landucci, a partner at Alphamatrix Finance in Geneva, told Bloomberg.
February 12, 2025 | Daily JAM, Morning Briefing |
CPI inflation rose by more than expected in January, as prices for groceries, housing and energy all picked up. The headline, all-items Consumer Price Index rose by 3.0% in January from a year earlier, the Labor Department reported Wednesday morning. That’s slightly above the 2.9% annual rate reported in December. The core index, which strips out volatile food and energy prices, was also higher, showing a 3.3% annual rate.
