Category Archives: Economic Analysis

Yellen, the Octoconomist?

Harry Truman famously said, “Give me a one-handed economist! All my economists say, ‘On the one hand…on the other.’” Chair Yellen is not a one-handed economist. Her speech in Jackson Hole shows she’s probably not even a two-handed economist. She’s … Continue reading

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Fed minutes: The few versus the several

The minutes from the Federal Open Market Committee (FOMC) meeting in July didn’t reveal much, but what they did reveal was interesting. First, there was the battle of the few versus the several. A few of the participants thought wage … Continue reading

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Is the Fed behind the curve?

Consumer prices increased 0.1% in July, or 2.0% over the past 12 months. The Federal Reserve (Fed) favors the Consumer Price Index (CPI) to measure personal consumption expenditures (PCE). The difference between the CPI and PCE is mainly in the … Continue reading

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Rising tensions and falling prices

Where is the bottom? That’s the question on a lot of investors’ minds. How low will yields go on Treasuries? How wide will spreads get in the credit markets? How low will the S&P 500 Index go? I do not … Continue reading

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Employment situation: Still not great, but better

Nonfarm payrolls expanded by 209,000 in July while the numbers for June and May were revised up a net 15,000. The unemployment rate inched a bit higher to 6.2%. Payrolls made tepid gains across most industries. Average hourly earnings, a … Continue reading

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Argentina’s default—another symptom of deeper problems

After failing to reach agreement with creditors yesterday, Argentina defaulted on bonds it restructured after its previous default in 2001. Although Argentina deposited interest payments it owed with its trustee, a ruling by a U.S. judge prevented the trustee from … Continue reading

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GDP’s big bounce

Gross domestic product (GDP) grew 4% on a seasonally adjusted and annualized basis from the first quarter. The first quarter’s estimate was revised from a 2.9% contraction to a 2.1% contraction. The bounce from the first quarter was much greater … Continue reading

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This is not 1994’s bond market, so don’t expect 1994’s crash

On Monday, The Wall Street Journal published yet another article that warned us not to forget how badly bond investors got burned when the Federal Reserve (Fed) raised the federal funds rate in 1994. According to this article, there are … Continue reading

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There’s one missing ingredient in this economic recovery: Housing

A strong pace of housing activity remains the missing ingredient in this cyclical expansion. Housing activity, as measured by housing starts, has led the economy into recessions and then has rebounded strongly to lead the cyclical recovery. Five years into … Continue reading

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Real and imaginary inflation

The Consumer Price Index (CPI) for June increased 0.3% from May, mainly driven higher by rising gasoline prices. Over the past 12 months, the CPI has increased 2.1%. Don’t worry; the Federal Reserve (Fed) isn’t going to imminently increase rates. … Continue reading

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