Tag Archives: Federal Reserve

I joined Chris Wolfe from First Republic Wealth Management on the set of Bloomberg’s Daybreak to discuss market developments and the outlook for the US economy. We generally agreed that while the economy is slowing it is doing so from unsustainably strong levels. We also are both highly convinced that the Fed will increase rates later this month, and anticipate two hikes next year.  Investors, understandably with scar...

But there is some softness at the microeconomic level.US employment rose by 155,000 in November (+1.7% year on year (y-o-y), decelerating from +237,000 in October. The three-month average dropped as well, but is still a healthy 170,000/month (it was 214,000 up to October 2018). November’s wage growth was unchanged from October’s pace of 3.1% y-o-y.Most cyclical indicators continue to flash green, and there are limited signs of a downturn in the US economy right now; the solid macro picture...

Swiss Franc The Euro has risen by 0.39% at 1.1337 EUR/CHF and USD/CHF, November 29 Source: markets.ft.com - Click to enlarge FX Rates Overview: The biggest US equity advance since Q1 has helped lift global markets today. The MSCI Asia Pacific Index rose for the fourth session, and nearly all the bourses in the region rallied with the notable exception of China and Hong Kong. Almost all the sectors in Europe are...

The investment climate will be shaped by three events next week. ECB President Draghi’s testimony before the European Parliament to kick-off the week. Fed Chairman Powell speaks to the NY Economic Club in the middle of the week. Presidents Trump and Xi are to meet at the G20 meeting to end the week in hopes of dialing back the escalating trade conflict. Also at the G20 summit, the NAFTA2.0 is expected to be signed, and...

Often, and apparently wrongly attributed to Mark Twain is the observation that it is not what we know that gets into trouble, but “what we know that just ain’t so.” Now though, investors suffer from a different problem. Several processes are in motion, and there is little confidence in their outcomes. Among these are Brexit, US-China trade, the trajectory of Fed policy, and the EC’s efforts to enforce the agreed-upon...

I joined Charles Payne on Fox Business TV for a broad economic discussion today.  Payne, like many, are concerned that the Fed continues to tighten and worries this is going to end the business cycle. He also argued that the strong dollar was a significant threat of US multinational earnings. Charles Payne on Fox Business TV In this roughly 6.5 minute clip of the entire discussion (here), I suggest that the best...

The Federal Reserve’s confidence in the economy and its need to continue to gradually increase interest rates stands in sharp contrast to most of the other major central banks. The European Central Bank will finish its asset purchases at the end of the year, but it is in no position to begin to normalize interest rates. Indeed, the risk is that it may feel compelled to off another Targeted Long-Term Repo, which would,...

Last month’s downdraft in equities spooked investors. The fear that is often expressed is that the end of the business cycle may coincide with the end of a credit cycle and a return to 2008-2009 crisis. It seems like an increasing number of economists agree with the sentiment expressed by President Trump that the Fed is too aggressive. Of course, they do not think the president should comment on Fed policy, but they...

An assessment of the US economy is an important input into the expectations of the dollar’s behavior in the foreign exchange market. As a currency strategist, my views of the US economy are often subsumed in discussions or talked about indirectly by talking about Fed policy.  However, in this clip with Alix Steel and David Westin, I have an opportunity to sketch outlook for the US economy.  I agree with those that do...

The Federal Reserve did what it was widely to do. The fed funds target range was lifted 25 bp to 2.00-2.25%. Three-quarters of Fed officials anticipate a hike in December. The market had discounted around an 80% chance. The Fed sticks with the three rate hikes in 2019 and one in 2020. The year-end rate in 2021 is the same as in 2020. The Fed is signaling that it does not expect the fed funds target to move above...