Post Tagged with: "Federal Reserve"

Trump is just a conventional politician who uses over-the-top bluster, NAFTA edition

Trump is just a conventional politician who uses over-the-top bluster, NAFTA edition

This morning, the Trump Administration called the leaders of Canada and Mexico to tell them that he “agreed not to terminate NAFTA at this time,” showing, yet again, that Donald Trump is much less audacious a President than some expected. The question is why. About two months ago, I surmised that despite all his hot rhetoric, Trump’s bark was worse […]

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What will policy normalization mean for credit markets (wonkish)

What will policy normalization mean for credit markets (wonkish)

Given recent hawkish Fed statements and the potential for even more than three hikes, all of this is bullish for longer-duration Treasuries but much less so for auto ABS, high yield and emerging markets.

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Why the March 2017 jobs report won’t change the Fed’s strategy

Why the March 2017 jobs report won’t change the Fed’s strategy

The 98,000 jobs added to payrolls in the US in March were well below the consensus estimate of 178,000, especially when you consider downward revisions to January and February totalled 38,000. I don’t believe this matters for the Fed though; policy tightening will continue apace.

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Jobless claims and ADP data positive ahead of jobs report

Jobless claims and ADP data positive ahead of jobs report

The consensus for the March jobs report is for an addition of 178,000 jobs. The unemployment rate is expected to remain unchanged at 4.7%. Other data show the risk is to the upside here.

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Why the Fed minutes show the FOMC moving toward Bullard and balance sheet shrinkage

Why the Fed minutes show the FOMC moving toward Bullard and balance sheet shrinkage

What about running down the balance sheet — reverse QE if you will? I think this is where the Fed minutes offered some new thinking.

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Why the Fed was talking to big money investors, leading to a major leak

Why the Fed was talking to big money investors, leading to a major leak

I think I have the answer to at least one question: why was the Fed talking to big money investors in the first place. My thoughts follow below.

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Was it right to be on recession watch in 2016?

We are now three months into 2017 and we can look back on 2016 as a fairly good year economically for the US. So given that backdrop, was it right to worry about a recession in 2016? And what does that say about 2017? Here’s my view below.

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The Fed will continue to raises rates, even amid uneven economic data

The Fed will continue to raises rates, even amid uneven economic data

Today the Federal Reserve raised the base USFed Funds interest rate a quarter percentage point to the range between 0.75% and 1.00%. There was only one dissent from Minneapolis Fed President Neel Kashkari. And because this move was anticipated by everyone, the real question now goes to what comes next.

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The coming Fed hike and the problems with its communication

Now the market are putting the odds of a hike next week at 96%, a virtual certainty. But the very fact that Yellen and her compatriots commented on the likelihood of a rate hike at a specific meeting has been the subject of consternation.

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Financial conditions have eased enough to get the Fed to hike in March

For years, many Fed watchers have claimed that the Federal Reserve has a secret third mandate beyond inflation and full employment. And this past February 21st, for the first time a Fed President said directly that, indeed, the Fed does have a third mandate: financial stability.

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The yield curve is still flatter than at anytime since the last recession

The yield curve is still flatter than at anytime since the last recession

If you look at the difference in yield between 2 and 10-year treasuries, the numbers in the last year are the lowest since 2008, when the US economy was in a recession.

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Three charts which show the Fed is tightening aggressively

Three charts which show the Fed is tightening aggressively

I have three charts for you which demonstrate that the US Federal Reserve is tightening monetary policy.

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