<Click on graphic for larger image> Bloomberg.com – Prepare for the Great Moderation in U.S. Job Growth The Fed has failed, until recently, to prepare the markets for a slowing pace of job growth. Back-to-back months of employment growth that came in far below economists’ expectations would seemingly belie the notion that the U.S. economy… Continue reading Slowing Job Growth
The Washington Times – Donald Trump: Janet Yellen keeping interest rates low for political reasons Real estate mogul and Republican presidential candidate Donald Trump said Janet Yellen, who chairs the Federal Reserve, is keeping interest rates low for political reasons and that the Obama administration doesn’t want to risk triggering a possible recession before the… Continue reading Trump Weighs In On Yellen
The Economist – Buttonwood: Collateral damage How bank funding may be squeezed in the next crisis WHEN the financial system teetered on the brink of collapse in 2008, the biggest problem was a lack of liquidity. Banks were unable to refinance themselves in the short-term debt markets. Central banks had to step in on a… Continue reading Repo
<Click on graphic for larger image> Bloomberg.com – Banks’ Record Treasuries Stockpile Boosts Case for Fed to Hold Buying helped push U.S. 10-year yields below 2% this week Probability Fed will raise rates by December meeting is 30% U.S. banks are gorging on Treasuries in the latest sign investors expect the Federal Reserve to postpone… Continue reading Banks Buying Bonds
Comment The odds the Cubs win the World Series this year are 9/5 (below). This converts to a 36% probability. The probability the Fed hikes rates (CME website, also below) this year is 29%. So, the probability of the Cubs winning the World Series this year is greater than the probability the Fed raises rates… Continue reading Odds Of Cubs Winning The World Series Surpass The Odds Of A Fed Hike!
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<Click on chart for larger image> The Wall Street Journal – Jon Hilsenrath: Fed Doubts Grow on 2015 Rate Hike The chances of a Federal Reserve interest-rate increase in 2015 are diminishing amid new signs of anemic economic activity, a disappointing development for central bank officials who have been hoping to move this year after… Continue reading A 2015 Hike Becomes Less Likely By The Day
Bloomberg Briefs – Analysts Cut Forecasts as Rangebound Prices Damp Option Volatility Analysts have cut their forecasts for Brent, reducing the gap between their consensus outlook and the futures curve. Forecasters lowered their projections as Brent has mostly traded in a range from $44 a barrel to $50 a barrel since late August. This relative… Continue reading Crude Oil Forecasts
The Wall Street Journal – Greg Ip: Rates and Recession Risk: The Fed’s Catch-22 “No postwar recovery has died in bed of old age—the Federal Reserve has murdered every one of them.” The quip by Rudi Dornbusch, a renowned academic economist who died in 2002, captures the received wisdom in economics that recessions happen only… Continue reading The Market’s Role In Setting Rates
<Click on chart for larger image> <Click on chart for larger image> The Wall Street Journal – Softness in Retail Sales (Outside of Autos) Stirs Some Concern Economists see consumer weakness keeping Fed on hold on rate increase American consumers increased their spending in September amid strong auto sales, but slowing job growth and overseas… Continue reading Retail Sales
<Click on graphic for larger image> <Click on graphic for larger image> <Click on graphic for larger image> MoneyBeat (WSJ Blog) – The Best Hour to Be Invested in the Market this Year Is… Getting in and out of the market early has proven rewarding this year. Investing in the market at 10 a.m. Eastern… Continue reading Taking Seasonality To The Extreme
<Click on graphic for larger image> The Wall Street Journal – Treasury Bills Sold at Zero Percent Interest Top $1 Trillion Investors are handing the federal government a lot of free money. The pile of Treasury bills sold at an interest rate of zero since the financial crisis topped $1 trillion this summer and grew… Continue reading T-Bill Demand