On Thursday, August 27, Fed Chair Jay Powell spoke at the Fed’s annual Jackson Hole symposium. His talk was much anticipated, as it was expected that the old 2% inflation objective would be updated. In fact, the Fed had telegraphed the change; and the Fed has been following the newly announced policy for several months. The policy change allows the Fed to permit inflation to exceed the Fed’s announced 2% target without …Read More
The Economy: Navigating Scylla & Charybdis
In Greek mythology, Scylla and Charybdis were mythical sea monsters existing on the opposite sides of the Strait of Messina, between Sicily and the Italian mainland. Scylla was a six headed sea monster; Charybdis a huge whirlpool. Because they were so close together, any passing ship was threatened. In Homer’s Odyssey, Odysseus passed close to Scylla, losing only a few sailors rather than risking losing his whole ship in …Read More
Three Uncertainties Are Driving the Markets
The financial markets have been focused on three uncertainties: the strong and rising value of the dollar vis a vis other currencies, weakening U.S. economic indicators, and the timing and magnitude of Fed policy actions. All this with a background of the ongoing Greek tragedy and continued political strife and terrorism worries. Volatility has resulted. To show the market’s uncertainty, in the month of March, of the 19 trading days …Read More