Category Archives: Economic Analysis

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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Industrial production signals oil is near bottom?

Industrial production increased 0.1% in February. Manufacturing output fell 0.2%, which marks the third month in a row of declines, and was mainly driven by falling output of motor vehicles and parts. Production of light trucks had the biggest decline, … Continue reading

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February jobs report vindicates the Fed

Nonfarm payrolls increased a better-than-expected 295,000 in February, while the unemployment rate fell to 5.5%. The only notable industry with a decline in payrolls was mining, which includes the oil industry. Wages didn’t advance much, increasing only 2% year over … Continue reading

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Yellen’s testimony hints at rate-hike timing

Federal Reserve (Fed) Chair Janet Yellen delivered the semiannual Monetary Policy Report to the Senate today (she’ll deliver it to the House tomorrow). When she delivered the report on February 27, 2014, it set off a sell-off in small-cap stocks, … Continue reading

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ECB Minutes: More minutia than minutes

For the first time in its history, the European Central Bank (ECB) released the minutes of its policy meeting. This was good timing as the minutes were from one of the most important ECB meetings, the one where it announced … Continue reading

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Greece keeps playing bailout games

On Monday, talks between Greek officials and the Eurogroup (a group of finance ministers throughout the eurozone) broke down quickly. It seems as though the Greek finance minister was irked about the wording of a preliminary statement that extended Greece’s … Continue reading

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The Fed’s patience cuts two ways

I found the market reaction to the Federal Open Market Committee’s statement perplexing. Initially, the stock market rallied, the dollar weakened, and oil went up. These are the things I thought should happen with the Federal Reserve (Fed) expressing more … Continue reading

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FOMC: More hints of dovishness

In a unanimous vote, the Federal Open Market Committee (FOMC) kept monetary policy unchanged. The FOMC acknowledged that the economy has been expanding at a solid pace rather than merely a moderate pace. The labor market also got an upgrade, … Continue reading

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What’s next for Europe?

Summary The European Central Bank’s (ECB’s) bond-buying program is coming at a time when the banking system is ready to start lending again, so it’s like running with the wind at your back. The rise of the anti-austerity Syriza party in Greece … Continue reading

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ECB’s shock and awe—or confusion?

The European Central Bank (ECB) defied my expectations and said it intends to purchase 60 billion euros of investment-grade debt per month until September 2016. That intention can change, giving the ECB flexibility to expand and contract the asset-purchase program … Continue reading

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