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The ‘Insurance’ Cut Worry

Fed Chair Powell’s congressional testimony did little to allay market fears regarding the Fed’s underlying posture. Markets continue to be worried that, while the Fed is certain to cut the Fed Funds rate by 25 bps at July’s meeting, the rate reduction may turn out to be just an “insurance” cut, especially in light of the fact that the June jobs report has been portrayed as “strong.” Describing the cut …Read More

Estimating GDP is like pinning the tail, somewhere, on the donkey

Wall Street hangs on every number published by any government agency as if they are accurate to the 3rd decimal place.  The fact is, most are estimates, especially the GDP number. On top of this, the seasonal adjustment process probably was key in understating economic activity, and this GDP number is most likely going to be adjusted upward over the next two months (the number today was the first of three …Read More