October 2018 In recognition of the strength of the economy Fed Chairman Powell delivered the most hawkish speech of any Central Banker in the last ten years on October 2nd. Speaking before the National Association of Business Economists he described the economy as operating with “limited slack” and that “the Fed would act with authority […]
September 2018 The Federal Reserve releases the value and composition of their Open Market holdings every Wednesday afternoon. These are the securities the Fed bought when, in their judgement, the economy demanded artificially low interest rates. On Wednesday September 5, the value of the Open Market holdings fell below $4 trillion dollars for the first […]
August 2018 The U.S. economy continues to chug along with the second quarter growing at a revised 4.2% annualized rate. That strength has carried into the third quarter with the Atlanta Federal Reserve forecasting 4.3% growth for the period. That growth seems to have emboldened equity investors as the S&P 500 posted an all-time high […]
July 2018 The dog days of summer are upon us and the U.S. market has been relatively calm despite the daily barrage of news from around the globe. That’s not to say that global macro events are not on the mind of investors. Quite to the contrary. Donald Trump’s trade war is making the headlines […]
June 2018 In the days and weeks leading up to the recent imposition of tariffs on China, nervous investors sold stocks and pushed bond yields lower. However since the tariffs went into place stock prices have risen, with the S&P 500 just ticks away from its recent high and less than 3% away from an […]
May 2018 The bastion of calm that swept over capital markets evaporated in May, as a number of emerging market economies and their markets suffered under the strain of bad policy. After years in financial purgatory following their 2001 default, Argentina is again facing financial strain. The serial defaulter returned to the global bond market […]
April 2018 Now that we’re well into the new year and the first quarter earnings season is almost fully behind us, it makes sense to pause and try to understand where we are in the economic cycle and what we should expect in the near term future. The most notable recent change is the stock […]
March 2018 March has followed the pattern of the previous two months, with heightened equity market volatility creating worry for anxious investors. Despite that worry, the bond market has been a bastion of calmness with the 30-year bond trading in a relatively benign range of 3.22% to 3.00%. Given the continued strength of the U.S. […]
February 2018 Six weeks ago, as we closed out January, the S&P 500 Index settled just below its all time high. Financial pundits at the time were saying that a healthy correction would be good for the market. The term healthy correction has always seemed an oxymoron. How can a decrease in the value of […]
January 2018 The Federal Reserve, in managing the U.S. economy, is tasked with the dual mandate of ensuring full employment and stable inflation. The mandate is somewhat contradictory in that at full employment the tight labor force is likely to force wages higher which, in turn, risks pushing the overall level of inflation higher. That […]