Will the Fed Cause Another Recession?

The Fed raised the Federal Funds Rate by 25 basis points (a quarter of a percentage point) to 1.0%.  This is the anchor rate on the yield curve, and, most other rates respond to it, with shorter rates today responding more than longer rates.  It appears from their communications that they intend to hike rates […]

Market Melt-Up: Caution – Sentiment in Nosebleed Territory

Since my last column, the Dow Jones Industrial Average (DJIA) did indeed hit 20,000 and has since gone well beyond.  Most of the post-election run-up initially appeared to have occurred in the November 8th to December 20th period when the index went from 18,333 to 19,975, a rise of 1,642 points (7.9%).  Over the next […]

The Specter of Rising Rates

Suddenly, out of the blue, August’s data came in well below expectations; the economy now appears to be sputtering as we end the third quarter.  Yet the Fed has put the markets on notice that it intends to soon raise interest rates, or at least that is what the market thinks given the hawkish speeches […]

Assessing the market now that recession fears have disappeared

With recession fears now nowhere to be found, the market averages have raced their way back to a positive return for the year, a much-welcomed development considering where they were on Feb. 11. The bears have retired to their caves, and the negativism in the media has all but disappeared. The rising price of oil […]

The Fed — deer in the headlights?

When they walked into the meeting on Wednesday, Sept. 16, it is likely that the FOMC members (Federal Open Market Committee, the rate-setting committee of the Fed) did not know the interest rate decision they would make on Thursday. We had Jeff Lacker (Richmond Fed), Dennis Lockhart (Atlanta Fed), and John C. Williams (SF Fed) […]

What is up with the Yield Curve?

Originally published on Tahoe Daily Tribune’s website http://www.tahoedailytribune.com/news/opinion/15174122-113/tahoe-truckee-market-beat-what-is-up-with-the-yield-curve The Yield Curve walks into a bar. The bartender says, “Hey, you’re really getting into shape!” The Yield Curve replies, “Yep. I believe the Expectations Hypothesis is working on my slope!” The bartender inquires, “Are you sure?” To which the yield curve responds, “I’m positive.” I can’t […]