Tag Archives: Federal Reserve/Monetary Policy

There is gold in Asia, at least gold of the intellectual variety for anyone who wishes to see it. The Chinese offer us perhaps the purest view of monetary conditions globally, where RMB money markets are by design tied directly to “dollar” behavior. It is, in my view, enormously helpful to obsess over China’s monetary system so as to be able to infer a great deal about the global monetary system deep down beyond the...

The PCE Deflator for January 2017 rose just 1.89% year-over-year. It was the 57th consecutive month less than the 2% mandate (given by the Fed itself when in early 2012 it made the 2% target for this metric its official definition of price stability). Though there is a chance that the streak will end with the update for February, it should not go unnoticed how weak that number is given that oil prices in January were...

The second estimate for GDP was so similar to the first as to be in all likelihood statistically insignificant. The preliminary estimate for real GDP was given as $16,804.8 billion. The updated figure is now $16,804.1 billion. In nominal terms there was more variation, where the preliminary estimate of $18,860.8 billion is now replaced by one for $18,855.5 billion. Therefore, to net out with no change in real terms a...

If the economy is repeating the after-effects of the latest “dollar” events, and it does seem more and more to be that case, then analysis starts with identifying a range for where it might be in the repetition. New orders for durable goods (ex transportation) rose 4.3% year-over-year in January 2017 (NSA, only 2.4% SA), the highest growth rate since September 2014 (though not meaningfully faster than the 3.9% rate in...

Ross Perot famously declared the “giant sucking sound” in the 1992 Presidential campaign. The debate over NAFTA did not end with George H. W. Bush’s defeat, as it simmered in one form or another for much of the 1990’s. Curiously, however, it seemed almost perfectly absent during the 2000’s, the very decade in which Perot’s prophecy came true. Americans didn’t notice because there was a bubble afoot. That bubble,...

For the very few in the mainstream of economics who venture further back in history than October 1929, they typically still don’t go much last April 1925. And when they do, it is only to further bash the gold standard for its presumed role in creating the conditions for 1929. The Brits under guidance of Winston Churchill made a grave mistake, one from which gold advocates could never recover given what followed. There...

For the very few in the mainstream of economics who venture further back in history than October 1929, they typically still don’t go much last April 1925. And when they do, it is only to further bash the gold standard for its presumed role in creating the conditions for 1929. The Brits under guidance of Winston Churchill made a grave mistake, one from which gold advocates could never recover given what followed. There...

My colleague Joe Calhoun likes to remind me that markets and fundamentals only sound like they should be related, an observation that is a correct one on so many different levels. Stock prices, in general, and GDP growth may seem to warrant some kind of expected correlation, but it has proven quite tenuous at times especially in a 21st century sense. This divergence has sown a great deal of doubt and sometimes apathy...

It is largely irrelevant, but still the political theater is fascinating. As is now standard operating procedure, whatever comes out of the Trump administration immediately is conferred as the standard for awful. This is not my own determination, mind you, but that of the mainstream, whatever that is these days. And so it is with the first set of budget figures that include very robust growth projections, a point of...

Industrial Production in the United States was flat in January 2017, following in December the first positive growth rate in over a year. The monthly estimates for IP are often subject to greater revisions than in other data series, so the figures for the latest month might change in the months ahead. Still, even with that in mind, there is no acceleration indicated for US industry. After suffering through a more than...