Go to Top

Tag Archives

Tag Archives: interest rates

The “Economic Boom” Illusion

Upbeat data continues to make headlines. (The not-so-upbeat are relegated to the back pages.)  This week it was the +6.4% spurt in real GDP.  And, while the financial markets do feel a bit toppy, the S&P 500 still managed to eke out another record close on Thursday, April 29 (4211.47).  “Help Wanted” signs continue to be ubiquitous.  Companies are raising wages just to attract applicants.  The prices of lumber and …Read More

The Reopening High – Long-Term Issues Quite Concerning

The big news of the week was always going to be the monthly BLS Employment Surveys.  It was destined to move markets one way or the other, and since the +916K number from the Payroll Report (+1,072K if the +156K revision to February is included) significantly bested the 660K-675K consensus that was in the market, the equity markets are likely to move higher in the short-term, as is the longer …Read More

Fed Ignoring Market Rate Spikes – Basing Policy on “Actual Data”

The median of the Fed dot-plot (a summary of the individual member views on where Fed Funds will be over the next three years) indicated no changes in the Federal Funds Rate until 2024.  But, because the Fed upgraded its economic (GDP) forecast to 6.5% from 4.2% for 2021, and a few more FOMC (Federal Open Market Committee) members moved their “next rate hike” forecast into 2023, the market is …Read More

Careful Mr. Powell; Higher Rates Will Kill the Recovery

Treasury yields rose again this week; blame this one on Fed Chairman Powell.  In an interview at the Wall Street Journal’s Job Summit, he said that the Fed isn’t ready to stop the run-up in yields “until financial conditions tighten.”  In so saying, he paved the way for those financial conditions to tighten as markets immediately obliged.  We can’t help but think that it would have been better if he …Read More

The Rate Spike Will Damage the Recovery

Fed Intervention Needed There was quite a spike in interest rates the last week of February with the 10-Year T-Note spiking from a 1.36% level as of the close on Wednesday to as high as 1.60% intraday with a close of 1.55% on Thursday.  Friday’s close was 1.45%.  But, a lot of damage was done. It is naïve to think that this spike was caused by the inflation narrative, i.e., …Read More

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 Production was up nearly 1% (0.9%) in January.  So, why worry?  Infections and hospitalizations are …Read More