European Central Bank tries to have it both ways–which leaves nobody very happy
At today's meeting, the European Central Bank agreed to phase out its bond buying by the end of 2018 with purchases of $17.7 billion (15 billion euros) in each of the final three months of the year. (Bond buying will continue at the current rate of 30 billion euros a...
As expected, the Fed raises interest rates; as suspected, the Fed signals 4 increases in 2018 instead of 3
No surprise here: The Federal Reserve raised its benchmark short term interest rate by 25 basis points to 2% today from 1.75%. It was the second interest rate increase of 2018. But the Fed also signaled that it was more likely to raise rates two more times in 2018 for...
All eyes on the Fed’s Dot Plot today–it’s at a tipping point
Today, the market is betting, the Federal Reserve's Open Market Committee will raise its benchmark short term interest rate by 25 basis points to 2% from 1.75. The Fed will also say things, in its statement and Fed chair Jay Powell's press conference, about the number...
Moving on: With North Korea summit done, markets focus on Central Bank Week
The summit between U.S. President Donald Trump and North Korean dictator Kim Jong Un produced nothing of import, apparently meeting financial market expectations for "much ado about nothing," and all eyes on Wall Street have shifted to what I'm calling Central Bank...
An interest rate sign of our times–3% on a CD
So there I was, minding my own business, walking down Broadway in my neighborhood, and what do I see in the window of a local bank: An offer for 3% on a five-year CD. Now this wasn't in the window of one of the megabanks that dominate this sector in New York. But it...
Special Report on Investing in a Late Cycle Market Part 2: Sell offs in Late Cycle Markets are contagious, very contagious
The big reason to distinguish the business cycle from the credit cycle–as I did in Part 1 of this Special Report “Investing in a Late Cycle Market: Late Cycle Markets are crazy–Part 1, The problem”–is that the disruption caused by late credit cycle markets is way more contagious globally than the disruption created by late business cycle markets.
U.S. economy adds 223,000 jobs in May; odds of June interest rate increase bounce back
The U.S. economy added 223,000 jobs in May, well ahead of the 190,000 gain expected by economists surveyed by Briefing.com Revised figures for April showed the economy adding slightly fewer jobs, a revised 159,000 new jobs versus an initial 164,000. The official unemployment rate fell to 3.8% in May from 3.9% in April, matching a 18-year low.
Federal Reserve minutes to the rescue
The release of the minutes from the Federal Reserve’s May meeting turned markets from red to green this afternoon. The day had started off with just about everything in retreat on an avalanche of disquieting news. President Donald Trump seemed to back away from concluding a trade agreement with China. Emerging market analysts increased talk of a crisis from Argentina to Ankara. And then came the release of minutes from the Fed
Economy adds a middling 164,000 jobs in April
There was good news in today’s jobs report for April since the economy added 164,000 jobs, up from a revised 135,000 jobs in March. So yay! The jobs market rebounded from March weakness. And there was bad news in the report since economists had been projecting that the economy would add 193,000 jobs.
Fed leaves interest rates unchanged, seems to signal continued gradual interest rate increases for rest of 2018
As expected by the financial markets, the Federal Reserve left interest rates unchanged at today’s meeting of the Open Market Committee. As expected the Fed didn’t really clarify its stance on inflation and interest rate increases, acknowledging inflation is close to target without indicating any intention to veer from gradual tightening of monetary policy. But it left open the possibility that it might be willing to let inflation creep over 2% in the short run and for a short period of time
Inflation continues its march toward Fed’s 2% target
The Federal Reserve’s preferred measure of inflation, the core Personal Consumption Expenditures index (Which excludes fed and energy prices) rose to an annual rate of 1.9% in March the Commerce Department announced this morning. That was inline with economist forecasts and market expectations. The yield on the 10-year Treasury fell to 2.94%. It stood at 2.96% on Friday.
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