Why the Fed is Bluffing
As expected, the Fed “paused” after 10 straight rate hikes. They characterized this as a “skip,” not a “pause,” as the former implies the rate hiking regime is still in place while the latter has been construed to mean that the hiking cycle is over. The Fed does not want to convey that for fear […]
A Softening Economy Will Be Buffeted by Stimulus Withdrawal
While the story of the week was the big “miss” in Nonfarm Payrolls, most of the incoming data continue to be much softer than the markets or financial media let on, as they continue to ignore the implications. The chart above shows U.S. vehicle sales beginning in 2015. Note the steady sales levels until the […]
We Don’t Live in “Normal” Times
The equity markets are in one of those rare moods where they continue to rise no matter the news, even when there are riots in the nation’s capitol complex, and when non-farm payrolls fall -140K. Would you say this is “normal?” Regarding inflation expectations, interest rates rose rapidly along the Treasury yield curve with the […]
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 […]
Vaccine: That Pinhead of Light at Tunnel’s End
Pfizer’s vaccine announcement gave the equity market the vision and hope that some semblance of “normal” was closer than previously assumed; perhaps a light at the end of the tunnel. Reality is that, due both to the complex logistics of handling the Pfizer vaccine, the two shot inoculation process, and the voluntary system in America, […]
The Wile E. Coyote Market/Economy
The Wile E. Coyote stock market has now looked down. Nothing but air! The “good news” data from the U.S. economy is all stimulus related. Without stimulus, Q3 GDP would have fallen double digits. The economy has yet to face the oncoming eviction crisis in the rental markets and foreclosure tsunami in the commercial real estate market. […]