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Unemployment

Why Interest Rates Are Falling

#*!? CRASH BAM @#$ Suddenly, markets (well, at least the bond market) now see falling interest rates in the short and intermediate term. The 10-Year U.S. T-Note fell from 1.47% on June 30 to close at 1.29% on Thursday July 7 (a big move in just four market sessions). Some of the rapid fall was due to short covering, so the slight give back on Friday (to 1.36%) wasn’t a surprise. For context, …Read More

The Fed ‘Dots’ Put Financial Markets In A Tizzy

Financial markets became temporarily unglued with the release of the Fed’s post-meeting statement on June 16 and the publication of its “dot-plot” table. The dot-plot, originated in the Bernanke Fed in 2012, represents the 18 individual policy committee member views as to what the Fed Funds Rate level will be on December 31 of the next three years and then a longer-run view.  Despite Chair Powell’s reiteration at the post-meeting press …Read More

The Economy Slows; The Real “New Normal”

The virus’ resurgence has caused more business disruptions, raising the specter of a renewed economic slowdown.  Spending and income numbers have mainly been negative in Q4, and the much hoped for stimulus relief package is now stuck on the president’s desk. The Economy “Drop in Spending, Higher Claims Cloud Outlook for Growth,” WSJ, 12/24/20, A1. Restaurants: -3.7% November (M/M); -0.6% October Hotels/Motels: -8.7% November (M/M); -4.4% October Movie Theaters: -17.2% …Read More

Policy Rx for Recession Aggravates Income Inequality

T’was the week before Christmas and all through the house, not a creature was spending, not even your spouse; the stockings were hung by the chimney with flairs, in hopes that the Congress would supplement CARES. And so, it appears that the economy continues to deteriorate as the Congress attempts to put together another stimulus without provisions for certain favored constituents of either party – much easier said than done.  …Read More

Inflation Expectations Rise Even as the Economy Cools

It has now become clear, and mainstream, that the economy weakened significantly in November, and that such weakness will carry forward to year’s end, at a minimum.  The weakness occurred primarily in the services sector as the virus’ resurgence caused some governors to mandate new or additional service business restrictions. As a result, jobless claims have spiked, travel and hotel occupancy fell to even lower levels, and restaurant and other …Read More

Mr. Market Won’t Let the Grinch-Like Economy Steal This Christmas!

The employment data for November were downbeat, and those surveys were taken prior to many newly imposed restrictions including stay-at-home orders. Other economic data, including Black Friday-Cyber Monday spending, and manufacturing and service indexes also disappointed.  Pessimism also showed up in the Fed’s recent Beige Book, its survey of business sentiment. Yet, despite all the downbeat economic news and forecasts, equity markets set new all-time highs the week ended December …Read More