Today's topics include fiscal dominance, surveys' response rate problem, consumer spending, big equity inflows, big corporate inflows, BoE stays committed to inflation fight, and stock returns after first rate cut
Fed funds traders' accuracy on the outcome of an FOMC meeting increases as the meeting draws closer. They are less reliable when determining the outcome of meetings further out on the calendar.
The global upheaval of the past several years has prompted economists and Wall Street to question many longstanding economic beliefs. But one belief that has yet to change is that long-run inflation will deviate much from 2%.
For the last few decades we have been in a low interest rate environment where deficit spending would not cause major issues. However, a 40-year high in inflation prompted the Fed to tighten monetary policy at a fast pace. Higher rates mean the cost of servicing U.S. debt will follow higher.
Tax receipts only cover 73% of federal spending as net interest costs are projected to rise.
Buybacks offer companies a way to increase shareholder value without issuing a taxable dividend. Buybacks areoften dominated by the largestweighted companies in the index.
Updating the changes in central banks' balance sheets
A Long-Term Look at Housing Starts
Some interesting charts from our recent posts
Today's topics include Timiraos highlights the FOMC minutes, quantifying the fiscal problem facing governments, more on the consumer's ability to spend, higher rates' effect on homeownership, and a rally for the most shorted stocks