<Click on chart for larger image> Bloomberg.com – Here’s How the Fed’s Unemployment Projections Could Change This Week How low can you go? It’s a topical question as the Federal Reserve meets in Washington this week. Federal Open Market Committee officials in March projected that the level of unemployment would fall to 4.7 percent in… Continue reading Will The Fed Change Their Unemployment Projections?
<Click on graphic for larger image> The Wall Street Journal – Fed Decision Makers Wrestle With So-Called Natural Rate While Federal Reserve officials debate when to next raise short-term interest rates, they also are wrestling with the question of how high to lift them in coming years. Signs point toward the new normal being much… Continue reading Estimating The Natural Rate
The Wall Street Journal – Greg Ip: It’s a Good Thing the Fed Has Missed its Chance to Raise Rates. Here’s Why. The Fed’s main mission is low inflation and high employment, not boosting interest rates A shockingly weak May jobs report knocked the Federal Reserve off what looked like a clear course to raise… Continue reading Debating The Merits Of A Hike
Bloomberg.com – Noah Smith: Economics Struggles to Cope With Reality There are basically four different activities that all go by the name of macroeconomics. But they actually have relatively little to do with each other. Understanding the differences between them is helpful for understanding why debates about the business cycle tend to be so confused.… Continue reading Debating The Merits Of Macroeconomics
<Click on graphic for larger image> Bloomberg Business – Record-Low Inflation Expectations Sharpen Next Week’s Fed Debate Chicago Fed’s Evans proposed waiting for on-target inflation The debate around the Federal Reserve boardroom table next week just got more interesting. U.S. households’ long-term inflation expectations, a measure tracked closely by policy makers, fell to a record… Continue reading Inflation Expectations Continue To Fall
The Wall Street Journal – After Record Week, How Much Lower Can Bond Yields Go? Record-shattering declines in government-bond yields are forcing investors to reassess once again just how low interest rates can go…Even now, yields have a clear path lower, traders and portfolio managers said. Economic growth appears soft, inflation remains low, and central… Continue reading Bond Market Sentiment
The Wall Street Journal – Negative Rates Alone Struggle to Lift Growth Central banks are having a difficult time in their efforts to stimulate slumping economies Add up the market value of all of the government bonds trading at negative rates around the world, and it comes to more than $8 trillion, a testament to… Continue reading Negative Rates
<Click on chart for larger image> Reuters – Low ECB rates could raise risk of abrupt surge in risk premia An extended period of low European Central Bank interest rates could increase the risk of a sudden surge in risk premiums, and policymakers should consider the implications of financial imbalances, Bundesbank President Jens Weidmann said… Continue reading Financial Stability Concerns
Factset – Earnings Insight for June 10, 2016 Earnings Growth: For Q2 2016, the estimated earnings decline is -4. 9%. If the index reports a decline in earnings for Q2, it will mark the first time the index has r ecorded five consecutive quarters of year-over-year declines in earnings since Q3 2008 through Q3 2009.… Continue reading An Earnings Update
The Financial Times – Gavyn Davis: Why hasn’t the productivity crisis caused a bear market (yet)? The 2016 calendar year may well see productivity growth in the US economy slumping to around 0.5 per cent, a catastrophic outcome for an economy in the middle of a cyclical upturn. This is part of a worldwide phenomenon… Continue reading Productivity’s Slowdown
<Click on chart for larger image> Bloomberg Business – Shale King Returns to Fracking Wells After Oil Rallies to $50 Continental CEO says crude must top $60 before drilling anew Billionaire wildcatter urges Trump to ease regulations Crude almost doubled in the past four months to more than $50 a barrel, enough for Continental to… Continue reading A Stockpile Of Uncompleted Wells
<Click on graphic for larger image> Bloomberg.com – Inside the Buy-and-Sell Decisions for Japan’s Biggest Bond Funds Very hard to put more money into JGBs now,’ MUFJ Kokusai says Yields on 10- and 20-year bonds have dropped to records For Japanese fund managers trying to squeeze yield from their nation’s sovereign debt market, 20-year bonds… Continue reading Japanese Debt Gets Expensive