Category Archives: Economic Analysis

The Fed is ready to get the party started, but not yet

The April meeting of the Federal Open Market Committee (FOMC) seems like ancient history. Since the meeting, the dollar has weakened relative to the euro, Treasury yields have moved higher, and additional economic data is pointing to a somewhat soft … Continue reading

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Whither, or wither, the dollar?

If you are an investor with a 100% domestic portfolio, you might not think that changes in the value of the dollar matter to you. That would be wrong. The dollar matters to the profitability—and, loosely, to the stock prices—of … Continue reading

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Yellen warns about “quite high valuations”

Stock market valuations are lower today than they were yesterday. Why? A good chunk of it could be because yesterday Federal Reserve (Fed) Chair Yellen said stock valuations were “quite high” at a conference with International Monetary Fund Managing Director … Continue reading

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Low productivity growth: Cyclical, not a new trend

Nonfarm productivity (output per hour worked) declined 1.9% in the first quarter of 2015. Output declined 0.2%, while hours worked increased 1.7%. This is the second quarter in a row that productivity declined. The last time that happened was in … Continue reading

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Federal Reserve: Less confident than before

The Federal Open Market Committee’s (FOMC’s) latest policy statement suggests to me that July would be the earliest the Fed would hike rates. The policy statement acknowledged that there was a slowdown in economic activity, but the FOMC seems to … Continue reading

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Retail sales: Good news isn’t bad news for the markets

Retail sales advanced 0.9% in March, bouncing back a bit from the winter doldrums. For the first quarter of 2015, retail sales rose 2.1% compared with 2014. This is a meager pace of growth. Across the board, sales advanced decently, … Continue reading

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China to weaken its currency?

China’s exports fell 14.6% year over year in March. This doesn’t bode well for Wednesday’s release of China’s first-quarter gross domestic product (GDP) numbers. Exports are approximately 26% of China’s GDP, though that is down from nearly 40% of GDP … Continue reading

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FOMC minutes: Marching closer to liftoff

The minutes from the March 17–18 Federal Open Market Committee (FOMC) meeting showed a divided Federal Reserve (Fed). It seemed nearly unanimous that the labor market was doing well, but there was a lot of disagreement about the outlook for … Continue reading

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Yellen: Fed’s here to help—not hurt—the economy

Federal Reserve (Fed) Chair Janet Yellen delivered a speech at a research conference sponsored by the Federal Reserve Bank of San Francisco. The title of Chair Yellen’s speech was, “Normalizing Monetary Policy: Prospects and Perspectives.” She didn’t bury the lede … Continue reading

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Markets: Why so gloomy about durable goods?

Yesterday’s February durable-goods report jarred investors back to reality. The rapid growth of the U.S. economy in the second half of 2014 was likely a bounce-back from a miserable winter in the first quarter of 2014. The decline in new … Continue reading

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