Fed Actions (Inactions) are Key to the Economic Outlook

Over the past week or so, we’ve seen some backup in market interest rates. The 10-Year Treasury yield (chart) closed at a 4.15% on Friday (January 19), up 21 basis points from its 3.94% level a week earlier, and 3.79% on December 26th. The rise in market rates was mainly due to the hawkish tone […]

Data Not Conducive to Wall Street’s “Soft-Landing” Scenario

One of the two major economic/market events that occurred last week (week of August 20) was the stellar performance of Nvidia (NVDA) which, unlike the retailers, beat on both top and bottom lines and whose stock price has soared from a 112 low last October to a high print of nearly 503 early on Friday […]

Dysfunctional Credit Markets – Still Waiting on the Fed

As the week ended, U.S. credit markets appeared confused, if not outright dysfunctional.  The 10-Year Treasury yield began February at 1.09% and reached an interim peak of 1.54% on February 25.  Then it retreated to 1.42% as markets thought the rise had simply been overdone.  But Fed Chair Powell’s refusal to assure financial markets regarding […]

Despite Wall Street Hype, Inflation is Not Imminent

Retail sales rose a record 5.3% M/M in January after three months in a row of decline.  No doubt the $600 checks from the late December “helicopter” money drop played a large role.  The Atlanta Fed now says that their GDP model pegs the current quarter’s growth at +9.5% (Annual Rate (AR)).  In addition, Industrial […]

The Inflation Scare

Interest rates backed up last week.  The 30-year T-Bond, which was 1.19% on August 4, closed at 1.44% on Friday (August 14).  The 10-year T-Note closed at 0.71%.  It was 0.52% on August 4.  The CPI showed up with a +0.6% M/M rise (7.4% annual rate) for July.  That pushed the Y/Y rate to +1.0% […]