May 29, 2022 | Daily JAM, Weekend JAM |
I’m looking for a test of the new “Fed Call” theory.
A few weeks ago, before last week’s rally anyway, the theory starting going around that the “Fed Put” (sometimes called the “Powell Put”) was dead. The Fed Put (in place since the days when it was called the “Greenspan Put”) held that investors and traders didn’t have to worry about the dangers of a big downside move in the stock market because the Federal Reserve would ride to the rescue, flooding the financial markets with cheap money, and rescuing stocks. The new thinking, however, was that with the Fed looking to contain potentially run-away inflation, the Fed would be happy to see stocks take a substantial but not dangerous tumble because that would act to damp sentiment and restrain spending. A decline in stock prices was, for this point of view, an ally of the Fed’s policy of increasing interest rates. The question is, of course, how active the Fed would be in “encouraging” a decline in stock prices
February 16, 2022 | Daily JAM, Short Term |
Back on January 26–a date so far in the past if judged by changes in financial data–according to minutes of that central bank meeting related today, February 16, Federal Reserve officials concluded that they would start raising interest rates soon and were on alert for persistent inflation that would justify a faster pace of tightening. Since then, CPI inflation has jumped to an annual 7.5% in January and employers have added almost 500,000 new jobs. The markets have no doubt that the Fed will raise interest rates at its March 16 meeting and has strongly moved to favor a 50 basis point increase in the Fed Funds rate rather than the traditional 25 basis point move. The financial markets now price in 150 basis points of interest rate increases in 2022
June 15, 2021 | Daily JAM, Morning Briefing |
Retail sales fell by 1.3% in May from April, the Commerce Department reported this morning. Economists surveyed by Bloomberg had projected a 0.8% month over month drop. The month to month drop in retail sales was the first drop in month to month sales since February. Retail sales still grew a very solid 23% year over year as the economy continued its recovery from the pandemic recession of 2020.
August 7, 2019 | Daily JAM, Morning Briefing, Short Term |
Shares of Apple (AAPL) climbed 0.21% to lead the Technology Select Sector SPDR ETF (XLK) higher by 0.40% as of 2 p.m. trading in New York. That helped disguise what is otherwise a return to the risk off trading of Monday after Tuesday's rally--although with smaller...
August 5, 2019 | Daily JAM, Short Term |
It would be unwise to assume that today's retaliation by China is the last tit for tat in the U.S.-China war. What "reasonable" fears are making rounds today? That the Chinese decision to let the yuan break the 7-yuan-to-the-dollar barrier isn't the end of the slide...
August 2, 2018 | Daily JAM, Mid Term, Volatility, You Might Have Missed |
Yesterday the Treasury Department said that it will raise long-term debt issuance to $78 billion this quarter. That would be an increase from the $73 billion in sales last quarter and the third consecutive quarterly increase. The increased sales of Treasury debt are...
March 20, 2018 | Daily JAM, Morning Briefing, Short Term |
Ahead of tomorrow’s interest rate announcement from the Federal Reserve, 10-year Treasury yields remain stuck just below 2.90%. The bond market just can’t seem to admit that the Fed might raise interest rates three times in 2018–let alone a potential four times–although I think it is gradually working its way toward that consensus.
October 21, 2017 | Daily JAM, Friday Trick or Trend |
At least we, probably, know where the finish line is. Spokesfolk for the Trump administration have said that President Donald Trump will name his nominee to head the Federal Reserve before he heads off to Asia on November 3. But beyond that speculation is running wild.Â
