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Tag Archives: interest rates

The Rocky Road to “Normal”

The terms “normal,” “normalize,” and “neutral” are common in today’s economic discussions.  But, does anybody really know what “normal” is?  When the Federal Reserve (Fed) says that it  wants to “normalize” interest rates, do they have a rate scheme in mind?  Does it mean that rates will be similar to what they were 10-20 years ago?  That’s what most people believe “normal” is.  The truth is “normal” is significantly lower.  The current …Read More

December’s Petulant Children: Trump, the Fed, Markets

Surely, this was a December to remember, but due to financial pain, not joy. Prior to December, markets were uneasy, and this showed up in a downward pricing bias and significantly increased volatility. As measured by the intraday swings on the Dow Jones Industrial Average (DJIA) between high and low [(high-low)/prior close], volatility more than doubled between September (0.67% per day) and October (1.55% per day), as markets became concerned …Read More

Markets: Time to Reflect on Risk, not Return

The week ended September 7th saw a pull-back from the record highs set in late August. Perhaps we witnessed the infamous “double top” (January 26th and August 29th). It is clear that financial markets have become riskier, and, perhaps, it is time for investors to assess the risks inherent in their portfolios versus the prospects of future returns. There is a short-term and a long-term view, neither of which augurs …Read More

New Market Highs: It’s Not the Economy (Stupid)!

It had been 210 days since the S&P 500 had made a new record high, but, on Friday, August 24th, after several days of struggle, the market finally broke to a new high (2874.69). The struggle actually began the prior Tuesday (August 21st). During that trading day, the S&P 500 actually pierced the old record high intra-day (during the trading session). But Wall Street has its own set of quirky …Read More

Slower Growth, Inflation, the Fed, and End of Cycle Indicators

The U.S. economy itself appears to be doing well, but we see many end of cycle signs, including less than 4% unemployment, rising interest rates, emerging consumer inflation, a strained housing market, slowing growth worldwide, and huge instability now developing in the emerging market space. Economy Still Healthy The 0.8% rise in retail spending in May would seem to confirm that the U.S. economy is still expanding. We believe that …Read More